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Question
‘Game of Clones’, a reputed amusement company, has decided to run an advertising campaign for which it is hiring various celebrities. The campaign involves an expenditure of ₹ 150 Crores. Identify the financial decision involved in the above case.
Options
Long-term investment decision
Financing decision
Working capital decision
Dividend decision
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Solution
Long-term investment decision
Explanation:
The decision to spend ₹ 150 crores on an advertising campaign is a long-term investment decision (also known as a capital budgeting decision) because it involves a large amount of funds being invested to achieve future benefits, such as brand building, higher sales, and market growth. It is not about raising funds or managing day-to-day expenses but about committing capital for long-term returns.
