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Soft Capital Rationing
Internal limitations set by a company's management on the amount of funding allocated for new projects.
Debt Covenants
Agreements between a borrower and lender that stipulate certain conditions the borrower must adhere to, which can pertain to financial ratios, levels of income, or other financial benchmarks.
Time Value
The idea that having money now is more valuable than having the same sum at a later date because of its ability to earn more over time.
Profitability Index
A financial tool used to determine the relationship between the costs and benefits of a proposed project, calculated by dividing the present value of future cash flows by the initial investment.
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