BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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working capital decision
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capital budgeting decision
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financial decision
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dividend decision
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Detailed explanation-1: -The correct option is C. Capital Budgeting. Long term investment decision involves committing the finance on a long term basis. It is also known as capital budgeting decision.
Detailed explanation-2: -What is Capital Budgeting? Long-term decisions, typically involve longer time horizons, cost larger sums of money, and require a lot more information to be collected as part of their analysis, than short-term decisions.
Detailed explanation-3: -Capital budgeting decision may be defined as the firm’s decision to invest its funds in the long term assets in anticipation of an expected flow of benefits over a number of years. It involves a current outlay or series of outlays of cash resources in return for an anticipated flow of future benefits.
Detailed explanation-4: -A capital budgeting decision is both a financial commitment and an investment. By taking on a project, the business is making a financial commitment, but it is also investing in its longer-term direction that will likely have an influence on future projects the company considers.
Detailed explanation-5: -The capital budgeting process is also known as investment appraisal.