Which Method Is Preferred for Capital Rationing

question 45

Multiple Choice

Which method is preferred for capital rationing?

• A) Internal rate of return method
• B) Payback method
• C) Net present value method
• D) Both internal rate of return method and net present value method

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Definitions:

Physical World

The aspect of the universe that is understood through physical phenomena, including matter and energy, as opposed to the abstract or spiritual realm.

Scientific Revolution

A paradigm shift in which a new scientific theory replaces a problematic paradigm.

Nicolaus Copernicus

A Renaissance mathematician and astronomer who proposed the heliocentric model of the universe, placing the Sun, not the Earth, at the center.

Sun

The star at the center of our solar system, which provides light and heat to Earth, enabling life.