In Capital Rationing,an Initial Screening of Alternative Proposals Is Usually

question 57

Multiple Choice

In capital rationing,an initial screening of alternative proposals is usually performed by establishing minimum standards.Which of the following evaluation methods are often used?

• A) cash payback method and average rate of return method
• B) average rate of return method and net present value method
• C) net present value method and cash payback method
• D) internal rate of return and net present value methods

---

Definitions:

Inference

The process of drawing conclusions from facts or evidence.

Vertical Restraints

Business practices and contractual agreements between companies at different levels of the supply chain that restrict how a product or service can be sold.

Rule Of Reason

A legal doctrine used in antitrust law to determine if a business practice is permissible based on its procompetitive versus anticompetitive effects.

Vertical Restraint

Describes any restriction in a supply chain imposed by a company at one level (e.g., manufacturer) on a company at a different level (e.g., distributor), often affecting how the latter can sell or price its products.