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Teams are more likely to set lower performance standards for themselves than management would set.
Cost of Capital
The minimum rate of return a company must earn on its investments to maintain its market value and attract funds.
Capital Rationing
The process of selecting the most profitable projects to invest in when funds are limited.
Capital Budgeting
Capital budgeting involves the process of deciding which long-term investments or projects a company should undertake, based on potential profitability and risk.
Cost of Capital
The minimum earnings rate required by a company on its investment endeavors to maintain market valuation and attract funding.
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