Final answer:
Investing in a new manufacturing plant is a capital budgeting decision, as it involves a long-term investment that affects the firm's future profitability and operations.
Step-by-step explanation:
Among the options provided, investing in a new manufacturing plant is a capital budgeting decision. Capital budgeting refers to the process firms use to make decisions about investments in assets that are expected to generate returns over an extended period. Investing in a manufacturing plant is a significant commitment of resources that will impact the firm's operations over the long term. In contrast, hiring a new employee, purchasing office supplies, and advertising a new product often pertain to operational expenses, which are shorter-term expenses for the day-to-day running of the company.
Firms raise the financial capital needed for such capital budgeting projects through means such as securing funds from early-stage investors, reinvesting profits, borrowing through banks or bonds, and selling stock. These decisions greatly influence the firm's financial strategies and its ability to undertake large investment projects, such as the construction of new plants, which fall under investment expenditure