Read the passage given below and answer question.

Khanna Ltd. is a company engaged in production and trade of "Phulkari" work of Punjab. Its products are in great demand overseas. The company plans to open one more unit for manufacturing Phulkari products. For this purpose, it requires additional investment of Rs 10 crores. It involves committing the finance on a long term basis. The Finance Manager of the company has suggested issue of debentures at an estimated cost of 8%. The EBIT of the company was Rs 6,00,000 and total capital invested was Rs. 1,00,00,000. The company can also opt for issuing equity shares as an alternative to debt financing. A judicious mix of both sources - Debt and Equity would increase the EPS. 

"It involves committing the finance on a long term basis".

__________ concept of Financial Management is indicated from the above statement.

Capital budgeting decision

The correct answer is Option (1) → Capital budgeting decision

The concept indicated from the statement "It involves committing the finance on a long-term basis" is Capital Budgeting Decision. This decision pertains to the allocation of funds for long-term investments in projects, such as opening a new unit for manufacturing Phulkari products.