Capital Rationing Is Generally a Positive Action for a Firm

question 109

True/False

Capital rationing is generally a positive action for a firm because it prevents rapid growth, which can drive up the cost of capital.

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Definitions:

February Sales

The total sales revenue generated by a company specifically in the month of February.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Credit Sales

Sales made on account, allowing customers to pay for goods or services at a later date.

Direct Labor

The wages paid to employees who are directly involved in the production of goods or provision of services, considered a variable cost.