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:

Earth's Ecosystems

The complex networks of living organisms and their physical environment present on Earth, interacting as a system and including both natural and human-modified ecosystems.

Wilderness Areas

Natural environments on Earth that have not been significantly modified by human activity, designated for conservation and as habitats for numerous species.

Biological Diversity

The encompassing term for the variety among living organisms from all sources, including terrestrial, marine, and other aquatic ecosystems.

Sustainable Timber

Timber harvested in a way that maintains the long-term health and biodiversity of the forest, ensuring a continuous supply of wood.