Final answer:
The correct working capital management decision among the given options is determining the optimal level of inventory, as it directly relates to the management of a firm's current assets and short-term liabilities.
Step-by-step explanation:
The question asks to identify which option is a working capital management decision. Working capital management is concerned with managing the short-term assets and liabilities of a company. Among the options provided:
- Investing in new machinery is a capital budgeting decision.
- Hiring new employees can be considered a human resources decision.
- Determining the optimal level of inventory is indeed part of working capital management.
- Expanding into new markets is a strategic decision related to growth.
Therefore, the correct answer is determining the optimal level of inventory, as it relates to the management of a firm's current assets and involves decisions related to maintaining sufficient stock to meet customer demand without incurring unnecessary holding costs.