Which of the Following Is TRUE Regarding Capital Rationing Decisions

question 72

Multiple Choice

Which of the following is TRUE regarding capital rationing decisions for capital assets?

• A) Companies should always choose the investment with the shortest payback period.
• B) Companies should always choose the investment with the highest net present value.
• C) Companies should always choose the investment with the highest rate of return.
• D) Companies should consider several different methods of evaluation before choosing an investment.

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Definitions:

Collective Action

The effort and action taken together by a group of people to achieve a common objective or to solve a problem collectively.

Changing Environment

A changing environment refers to the dynamic and evolving nature of surroundings or conditions, especially those affecting organizations and necessitating adaptability and flexibility.

Limited Resources

The finite nature of resources available for tasks or operations, often leading to prioritization and strategic planning.

Mapping-Software

A type of software used to create digital maps, enabling the visualization of spatial information for analysis and planning.