A Firm Which Is Faced with Hard Rationing

question 80

Multiple Choice

A firm which is faced with hard rationing:

• A) Has more capital funds available than it has positive net present value projects and thus must decide what to do with the excess funds.
• B) Allocates a fixed amount of capital funds to each of its divisions on an annual basis.
• C) Must decide how to allocate its limited capital funds among numerous positive net present value projects.
• D) Must decide how to allocate its limited capital funds among various business units.
• E) Has no capital funds available to finance a positive NPV project.

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Definitions:

World Income

The total income generated by individuals and entities across the globe.

Per Capita Income

The average income earned per person in a given area in a specified year.

School Enrollment

The process of registering or entering students into a formal educational institution or program.