"It involves committing the finance on a long-term basis." __________ concept of Financial Management is indicated from the above statement.

Question

‘Leno' is a reputed car manufacturing company, which is going to complete its 75 years in October 2024. The Chief Executive Officer of the company decided to take the company to a higher level. For this, he called a meeting of all departmental heads of the company. In the meeting, the Chief Executive Officer proposed a target to increase sales by 10 and profits by 20 in its Platinum Jubilee year.
The Human Resource Manager estimated that an increase of 500 workers would be required to achieve the target. The Finance Manager suggested that the company must hold adequate cash balances for various purposes, and he will prepare a statement showing the cash inflows and outflows for this particular period. Identify and explain two types of plans discussed in the above case.

Answer 1

Capital budgeting involves planning and managing a company's long-term investments in assets like projects and machinery. These decisions require substantial financial commitment and affect future growth and profitability, necessitating careful assessment of potential returns and risks before resource allocation.

"It involves committing the finance on a long-term basis." __________ concept of Financial Management is indicated from the above statement.

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The Correct Option is A

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