Question

Match the types of financial decisions in List I with their real-life examples in List II: 

• A. A-I, B-II, C-III, D-IV
• B. A-II, B-I, C-IV, D-III
• C. A-III, B-IV, C-I, D-II
• D. A-IV, B-III, C-II, D-I

Hint:

Investment = Long-term assets; Financing = Capital raising; Dividend = Profit sharing; Working Capital = Managing short-term resources.

Answer 1

The Correct Option is C

To solve the problem, we need to match each type of financial decision in List I with its corresponding real-life example in List II by creating a clear table.

1. Understanding the Concepts:

- Investment Decision: Decisions related to purchasing assets or investments for long-term growth.
- Financing Decision: Decisions regarding sources of funds such as equity or debt.
- Dividend Decision: Decisions about distribution of profits to shareholders.
- Working Capital Decision: Managing short-term assets and liabilities for daily operations.

2. Matching the items in a table:

List I (Financial Decisions)	List II (Examples)
A. Investment Decision	III. Buying new machinery for a production plant
B. Financing Decision	IV. Choosing between issuing equity or debentures
C. Dividend Decision	I. Deciding the proportion of profit to distribute
D. Working Capital Decision	II. Managing day-to-day cash and inventory levels

Final Answer:

The correct matching is:
A - III,
B - IV,
C - I,
D - II.