If a Firm Is Experiencing No Capital Rationing, It Should

question 93

Multiple Choice

If a firm is experiencing no capital rationing, it should accept all investment proposals

• A) as long as it has available funds.
• B) that return an amount equal to or greater than the cost of capital.
• C) that return an amount greater than the cost of equity.
• D) that are available, regardless of return.

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Definitions:

Contract Frustration

A legal concept where a contract becomes impossible to fulfill due to unforeseen events, relieving the parties of their duties.

Contractual Obligation

A duty, promise, or performance that is legally binding under a contract.

Frustrated

Feeling upset or annoyed as a result of being unable to change or achieve something.

Performance

The accomplishment of a task or duty in accordance with a contract, including the delivery of goods or services.