Question

These decisions affect the liquidity as well as the profitability of a business.

• A. Financing decision
• B. Dividend decision
• C. Working capital decision
• D. Capital budgeting decision

Answer 1

The correct option is C

Working capital decision

Answer (c) Working capital decision

Explanation: Business decisions relating to working capital and short-term financing are alluded to as working capital management. These policies usually target dealing with the current assets like cash and cash equivalents, debt holders, and inventories. It also includes short-term financing, to such an extent that cash inflows and returns are acceptable.