Final answer:
Option (b), Investors utilizing the decision-usefulness approach are interested in a company's capacity to generate future cash flows and the management's effectiveness in enhancing investments.
Step-by-step explanation:
According to the decision-usefulness approach, investors are primarily interested in assessing the company's ability to generate net cash inflows and management's ability to protect and enhance capital providers' investments. Investors consider various financing options available to a business, including early-stage investors, reinvesting profits, borrowing through banks or bonds, and selling stock. The approach essentially evaluates a company's financial health and prospects for future earnings, which can impact the decision of providers of financial capital such as bondholders and shareholders.
For instance, a small company looking to grow may choose to reinvest its earnings rather than distributing them as dividends. Moreover, companies can attract investment by offering shares or raising debt, even when they are not obligated to make immediate payments in the case of equity financing. Venture capitalists provide another layer of financial capital, as they can closely monitor management and strategy, especially in cases where there is imperfect information about the company's operations.