Read the passage and answer the following questions.

GreenTech Solutions, a renewable energy company, focuses on achieving financial stability and growth through robust financial management. The company ensures efficient allocation of business finance to expand operations, adopt new technology, and maintain a competitive edge. Its financial planning is centered on long-term sustainability, balancing profitability with eco- friendly initiatives.

To optimize its capital structure, GreenTech maintains a balanced mix of debt and equity, minimizing the cost of capital while ensuring financial flexibility. The firm undertakes thorough capital budgeting processes to evaluate projects like setting up new solar farms, ensuring only viable investments are pursued. Tools like Net Present Value (NPV) and Internal Rate of Return (IRR) guide decision-making.

GreenTech's dividend decision aligns with its growth strategy. While retaining a significant portion of earnings for reinvestment, the company ensures consistent dividends to satisfy shareholders. This approach strengthens investor confidence while funding expansion plans.

Efficient working capital management ensures smooth day-to-day operations. By optimizing cash flow, managing inventory, and negotiating favorable credit terms with suppliers, GreenTech avoids liquidity issues while meeting short-term obligations.

Through prudent financial strategies, GreenTech achieves its goal of profitability and sustainability, setting an example in the renewable energy sector.

Which component is NOT a part of GreenTech's financial management?

Pricing Strategy

The correct answer is option 1- Pricing Strategy.

Pricing Strategy is not a part of GreenTech's financial management.

Pricing Strategy– is part of marketing management, not financial management. It deals with setting prices for products or services, which is outside the scope of the financial decisions described in the passage. Therefore, Pricing Strategy is not a component of GreenTech’s financial management.

In the context of financial management, the key components mentioned in the passage are:

Capital Structure – managing the mix of debt and equity.

Financial Leverage – using debt to enhance returns, related to capital structure.

Dividend Decisions – balancing retained earnings with shareholder payouts.