Match the items of List - I with those of List - II and indicate the correct code:

List – I	List - II
(A) ABC Analysis	(I) Dividend Decision
(B) Walter Model	(II) Capital Budgeting Decision
(C) Capital Rationing	(III) Capital Structure Decision
(D) Net Operating Income Approach	(IV) Working Capital Management Decision

Code:

Correct option is C

The correct answer is (c) (A)-(IV), (B)-(I), (C)-(II), (D)-(III).
This match connects core financial tools with their respective decision-making areas.
ABC Analysis (A-IV) is an inventory categorization technique used in Working Capital Management to prioritize items based on value.
The Walter Model (B-I) is a classic theory determining how Dividend Decisions affect the share price based on the relationship between internal return (r) and cost of capital (k).
Capital Rationing (C-II) occurs in Capital Budgeting when a firm has limited funds and must select the most profitable combination of projects.
Finally, the Net Operating Income (NOI) Approach (D-III) is a Capital Structure theory suggesting that the total value of the firm is independent of its debt-equity mix.
INFORMATION BOOSTER
· ABC Analysis: Classifies inventory into A (high value, low quantity), B (moderate), and C (low value, high quantity).
· Walter’s Formula: Uses to calculate market price, highlighting the relevance of dividends.
· Profitability Index: A key tool used during Capital Rationing to rank projects when funds are constrained.
· NOI Approach: Proposed by David Durand, it assumes that the Weighted Average Cost of Capital (WACC) remains constant.
ADDITIONAL KNOWLEDGE
· (a) is incorrect because it wrongly associates ABC analysis with dividends and NOI with working capital.
· (b) is incorrect because Capital Rationing is a long-term investment (budgeting) constraint, not a capital structure decision.
· (d) is incorrect as it fails to recognize that NOI is a fundamental theory of capital structure.