The Procedure of Allocating a Fixed Amount of Funds for Capital

question 41

Multiple Choice

The procedure of allocating a fixed amount of funds for capital spending to each business unit is called:

• A) marginal spending.
• B) capital preservation.
• C) soft rationing.
• D) hard rationing.
• E) marginal rationing.

---

Definitions:

Annually Compounded

The process where interest is added to the principal sum of a loan or deposit once a year.

Rate of Return

The increase or decrease in the value of an investment during a set timeframe, shown as a percentage of the investment's starting price.

Portfolio

A collection of investments held by an individual or institution, including stocks, bonds, real estate, and other assets.

Successive Years

Consecutive years following one after the other without interruption.