Long-term investment decision is also known as:

Correct option is A

A long-term investment decision refers to decisions involving expenditure on assets that will generate returns over several years. These decisions typically involve evaluating and selecting fixed assets, such as machinery, buildings, new projects, expansion, or modernization.
This type of decision is known as a Capital Budgeting Decision, because it deals with:
· Allocation of funds to long-term projects
· Analysis of expected risks and returns
· Estimation of future cash flows
· Use of capital budgeting techniques like NPV, IRR, Payback Period, etc.
Capital budgeting is crucial as it determines the future earning capacity and growth potential of the business.
Hence, the correct answer is (a) Capital Budgeting Decision.
Information Booster
1. Capital budgeting affects the long-term financial health of a business.
2. Poor capital budgeting can cause huge financial losses since investments are irreversible.
3. It helps in deciding acceptance or rejection of a project.
4. Involves tools such as NPV, IRR, PI, Payback, Accounting Rate of Return.
5. Capital budgeting decisions involve high levels of risk and large fund requirements.
Additional Information
· (b) Dividend Decision: Related to how much profit should be distributed vs. retained; not about investment in long-term assets.
· (c) Working Capital Decision: Concerned with managing current assets and liabilities (short-term), unlike long-term investments.
· (d) Cash Management Decision: Deals with daily cash balances and liquidity, not long-term project evaluation.