If a Firm Is Subject to Capital Rationing, It Has

question 143

True/False

If a firm is subject to capital rationing, it has only a fixed number of dollars available for capital expenditures and numerous projects compete for these dollars.

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Definitions:

Risk Avoidant

Characterizes individuals or strategies that prioritize minimizing potential losses or risks.

Justice Principle

The ethical concept that emphasizes fairness and the equitable treatment of individuals in decision-making processes and distribution of resources.

Profits

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.