The Size of Assets, the Profitability and Competitiveness Are Affected by One of the Financial Decisions. Name and State the Decision. - Business Studies


The size of assets, the profitability and competitiveness are affected by one of the financial decisions. Name and state the decision.



Investment decisions or capital budgeting decisions made by a company affect its size of assets, profitability and competitiveness.

Concept: Financial decisions - investment
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2015-2016 (March) Delhi Set 1


Give the meaning of 'Investment' and 'Financing' decisions of financial management.

“A capital budgeting decision is capable of changing the financial fortunes of a business.” Do you agree? Give reasons for your answer?

Myra Ltd. manufacturing televisions is planning to expand its business and requires ₹250 crores for the same. A number of projects are available for the company to invest in and each project has to be evaluated carefully. The Finance Manager of the company has assessed the projects in terms of the rate of return from each project and wanted to select the one with the higher rate of return. But before selecting the project he has to take into consideration other factors also.
  1. Identify and state the financial decision discussed in the above paragraph.
  2. Explain the other factors that the Finance Manager should consider before selecting the project.

‘Zenith Mall’ is a famous shopping mall in Mumbai, owned by ‘Pinnacle Group'. It is very popular for its international and national brands of fashionable clothes, restaurants, cinema halls and food courts.

The management of Pinnacle Group has decided to open a new branch of the mall in Pune. This decision was very crucial for the management as it involves huge amounts.

  1. Identify and state the financial decision involved in the above case.
  2. State any two factors affecting the decision identified in (i) above.

What is meant by ‘Investment Decision’?

State how 'Long term Investment Decision' and 'Short term Investment Decision' affect the business.


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