The situation that exists when a firm has no means of financing its positive net present value projects is referred to as:
A) Financial stop-loss.
B) Contingency planning.
C) Marginal loss planning.
D) Soft rationing.
E) Hard rationing.

Question

Quizplus · Accepted Answer

Hard rationing refers to the situation where a firm cannot finance all of its projects with positive net present value due to external constraints, such as lack of access to capital markets or insufficient external funding.

The Situation That Exists When a Firm Has No Means