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Identify the correct statements in the context of financial decision :

(A) Financial decision includes investment decision, financing decision and dividend decision

(B) Short term investment decision is also known as 'capital budgeting decision'

(C) Short term investment decision is also known as 'Working capital decision'

(D) Investment decision includes raising funds from equity or debt

(E) Investment decision includes short term and long term investment decision

Choose the correct answer from the options given below :

Solution

Correct Option: 1

Financial decisions include investment, financing, and dividend decisions (A correct). Long-term investment decision, not short-term, is called capital budgeting (B wrong). Short-term investment decision is indeed working capital decision (C correct). Raising funds from equity/debt is financing decision, not investment (D wrong). Investment decision has both short- and long-term aspects (E correct). So A, C, E are correct.

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