Question

_________ decision is exhibited in the above case.

• A. Working Capital
• B. Dividend
• C. Investment
• D. Investment and Financing

Hint:

Investment = Where to invest funds; Financing = How to raise funds for investment. Both are crucial for business growth.

Answer 1

The Correct Option is D

The case involves two important financial decisions: 
- Investment decision: Deciding to invest in a new manufacturing unit is a long-term capital allocation choice that determines the company's growth and expansion strategy. 
- Financing decision: Deciding how to raise the necessary funds” whether through equity, debt, or a mix" is critical for managing financial risk and cost of capital. Both decisions are interlinked; good investment opportunities require suitable financing to maximize shareholder value.