a. Investment decision has been taken by Arun. Investment decision seeks to
determine as	to how the firm's funds are	invested	in different assets. It helps	to
evaluate	new	investment	proposals and select	the	best option on the basis of
associated risk and return. Investment	decision	can	be	long term or short-term.	A long-term investment decision is	also called a	Capital Budgeting decision.	For example,	a social	or charitable	project is often not approved based	on rate of
return, but more on the desire of a business to foster	goodwill	and	contribute	back to its community.
b.Working capital, also called net working capital, is a	liquidity	ratio that	measures a company’s ability to pay off	its current liabilities with its current	assets. Working capital is calculated by	subtracting	current	liabilities from	current	assets. The three	factors	mentioned in	the	paragraph which are likely	to	reduce	the	working capital requirements	of	his	business are	as follows:
i.  Availability	of	raw	material: As	there is	easy availability of Sandalwood	which is	used as	the	base material for	production, the	working	capital	requirements of	his	business will	be	less	as there is no need to	stock the	raw	materials.
ii. Production cycle: The production	cycle is shorter and less time is required to
manufacture	incense	sticks. Thus,	the working capital requirements of	his
business will	below.
iii. Credit availed: Due	to the fact that the suppliers of	other types of raw material
needed for production follow a	liberal credit	policy, the business can be
operated on	minimum working capital..