Question

A decision to acquire a new and modem plant to upgrade an old one is a

Options

• financing decision

• working capital decision 

• investment decision

• None of the above

Answer 1

investment decision

Explanation - 

Purchasing a new and modern plant to replace an older one is an investment decision. The decision to invest funds in order to generate the best potential return is referred to as an investment decision. The decision to purchase a new plant is a long-term investment that affects the company's long-term operating and earning capabilities.

Working capital decisions, on the other hand, are those that have an impact on the business's day-to-day operations. Financing decisions, on the other hand, pertain to decisions on where the funding will come from.