When a Firm Is Facing Capital Rationing Which of the Following

question 142

Multiple Choice

When a firm is facing capital rationing which of the following is true?

• A)the cost of capital is no longer the appropriate opportunity cost.
• B)firms can fully rely on either IRR or NPV as a criterion.
• C)PIs are often useful to conclude on the optimal solution.
• D)the investment decision should be based on which combination of projects generates the highest total NPV, regardless of the cost of the investment.

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Definitions:

Continuous Improvement

An ongoing effort to enhance products, services, or processes through incremental adjustments or innovations.

Employee Participation

Employee participation involves engaging employees in decision-making processes within an organization, leading to increased motivation and commitment.

Team Building

Activities and exercises designed to strengthen relationships and improve cooperation among team members.

Maintenance Leadership

Leadership focused on maintaining the current state of operations and ensuring that organizational processes run smoothly.