The correct answer is option (4) : Investment decision
Investment decision
- The investment decision is the decision in which a company has to choose where to invest its resources so that it is able to earn the maximum possible return for their investors. This decision is concerned with the allocation of capital to different assets or projects with the aim of maximizing the value of the firm. The investment decision is a crucial decision for ant company as it involves committing a large amount of capital for a long period of time. The investment decision can be long-term or short-term, and it is also known as capital budgeting decision.
Working Capital decision
- The working capital decision is concerned with the management of a company's short-term assets and liabilities. It involves decisions related to the management of current assets such as cash, inventory, and accounts receivable, and current liabilities such as accounts payable and short-term loans. The objective of working capital management is to ensure that the company has sufficient liquidity to meet its short-term obligations and to optimize the use of its working capital.
Financing decision:
- The financing decision is concerned with the selection of the best financing alternative for a company. It involves decisions related to the sources of funds for the company, such as equity, debt, and hybrid securities. The objective of the financing decision is to raise the required funds at the lowest possible cost and to ensure that the company has the required financial resources to meet its long-term obligations.
Dividend decision:
- The dividend decision is concerned with the distribution of profits to the shareholders of a company. It involves decisions related to the amount of profits to be distributed as dividends and the retention of profits for future growth and expansion. The objective of the dividend decision is to strike a balance between the distribution of profits to shareholders and the retention of profits for future growth and expansion.
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