Capital Rationing May Be Beneficial to a Firm If It

question 30

Multiple Choice

Capital rationing may be beneficial to a firm if it:

• A)reduces a firm's interest expense.
• B)weeds out proposals with weaker or biased NPVs.
• C)allows managers to select their favourite projects.
• D)increases funds to be used for other purposes.

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Definitions:

Regulations

Rules or directives made and maintained by authorities that govern behaviors or activities.

Minimal Education

Refers to the lowest level of formal education or training necessary for a particular job or position.

Antitrust Laws

Legislation that prohibits firms from combining in a way that would stifle competition within that industry.

Large Businesses

Entities that operate on a large scale, typically characterized by significant employee numbers, vast operational reach, and substantial revenue streams.