The _________ decision relates to how the firm's funds are invested in different assets.

profit

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invetment

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financing

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dividend

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Solution

The correct option is B invetment
Investment Decision relates to the determination of total amount of assets to be held in the firm, the composition of these assets and the business risk of the firm as perceived by its investors. It is the most important financial decision. Since funds involve cost and are available in a limited quantity, its proper utilization is very necessary to achieve the goal of wealth maximization.
Investment decisions includes investment in fixed assets (called as capital budgeting). Investment in current assets are also a part of investment decisions called as working capital decisions.

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