What is Capital Rationing? | Nursing Term Papers
[ad_1]
The availability of funds effects the capital budgeting decisions. The amount of funds available for capital expenditures will be either limited or unlimited. Funds would be considered unlimited when a firm is willing to acquire, through borrowing or equity, any amount of capital as long as the return on the investment is higher than the cost of the funds. When the funds that a firm will make available for capital investment are limited, and the firm has more opportunities for profitable investments than the limited funds can cover, the condition is described as capital rationing.
Your assignment is to focus on the following:
- Describe how capital-budgeting decision criteria would be different in a capital-rationing situation than in a situation in which capital rationing was not necessary, and explain the reasons for the difference in criteria.
- Describe the discounted-cash flow technique or techniques you would recommend in a capital-rationing situation and explain your reasons for your recommendation.
Write your response as a one-page memo
The post What is Capital Rationing? appeared first on Brainy Term Papers.
What is Capital Rationing? was first posted on March 6, 2021 at 7:02 pm.
©2019 “Brainy Term Papers”. Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at support@homeworksmith.com
“Is this question part of your assignment? We Can Help!”
