Question

A decision to acquire a new and modern plant to upgrade an old one is a:
a. financing decision
b. working capital decision
c. investment decision
d. None of the above

Answer 1

Answer:

A decision to acquire a new and modern plant to upgrade an old one is a : investment decision

Among the given options option (c) investment decision is the correct answer.

Explanation:

This season involves careful selection of assets in which funds are to be invested. Investment decisions can be long term (capital budgeting decision)  or short term (working capital decisions).

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Here are more questions of the same chapter :  

The cheapest source of finance is:

a. debenture            b. equity share capital

c. preference share d. retained earning

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Financial leverage is called favourable if

(a) Return on investment is lower than the cost of debt

(b) ROI is higher than the cost of debt

(c) Debt is easily available

(d) If the degree of existing financial leverage is low

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Answer 2

c) investment decision...