Capital rationing
A) exists when a company sets an arbitrary limit on the amount of investment it is willing to undertake, so that not all projects with an NPV higher than the cost of capital will be accepted.
B) generally does not permit a company to achieve maximum value.
C) seems to occur quite frequently among corporations.
D) All of the above
D
You might also like to view...
National income is the sum of all of the following except
A. wages. B. savings. C. interest. D. rent.
If most businesses in an industry are earning a 13 percent rate of return on their assets, but your firm is earning 23 percent, your rate of economic profit is
a. zero. b. 10 percent. c. 23 percent. d. 36 percent.
The Second Fundamental Theorem of Welfare Economics requires
A. that indifference curves be convex to the origin. B. that isoquants be concave to the origin. C. that there are no set prices for Pareto efficient allocations. D. that production be twice as large as consumption. E. all of these answer options are correct.
If disposable income is $900 billion when the average propensity to consume is 0.8, it can be concluded that:
a. Consumption is $800 billion b. The marginal propensity to save is 0.1 c. The marginal propensity to consume is 0.9 d. Saving is $180 billion