Correct Answer:
C. Production decision
A finance manager's primary role involves making decisions that maximize shareholder wealth by efficiently managing the company's financial resources. This typically encompasses three key areas: investment, financing, and dividend decisions.
- The correct answer, Production decision, is not a function of a finance manager. Production decisions fall under operations management, focusing on how goods and services are created, including process design, capacity planning, and quality control.
- Investment decision (A) involves capital budgeting – deciding where to allocate funds for long-term assets.
- Financing decision (B) concerns how to raise capital – choosing between debt and equity.
- Dividend decision (D) relates to how much of the company's profits should be distributed to shareholders versus retained for reinvestment.
These three financial decisions are central to the finance manager's strategic responsibilities.