Capital Rationing Is a Process Adopted When a Company Has

question 49

True/False

Capital rationing is a process adopted when a company has limited resources,and it must find ways to reduce operating expenses in all of its divisions and units.

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Definitions:

Investment

The allocation of resources, usually money, in expectation of achieving a future return or profit.

Annual Dividend

The total amount of dividends a company pays out to its shareholders each year, usually quoted as an amount per share.

Constant Rate

A stable growth or decline rate over a period, often used in the calculation of interest and financial forecasting.

Discount Rate

This is the interest rate used in discounted cash flow (DCF) analysis to present values of future cash flows back to their value today.