"The Finance Manager of the company has suggested issue of debentures at an estimated cost of 8 %". The above statement conveys _________ type of financial decision.

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

The issuance of debentures constitutes the procurement of long-term capital through public or investor borrowing at a predetermined interest rate. This action exemplifies a financing decision, which entails determining the optimal proportion of debt and equity for funding a company's operations and expansion, while simultaneously reducing expenditure and financial exposure.

"The Finance Manager of the company has suggested issue of debentures at an estimated cost of 8 %". The above statement conveys _________ type of financial decision.

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The Correct Option is C

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