When firms do not have sufficient available financing to invest in all of the positive net present value projects they have identified, _____ is (are) said to exist.
A) excess financing
B) contingency options
C) strategic options
D) managerial options
E) capital rationing

Question

Quizplus · Accepted Answer

Capital rationing occurs when a company does not have enough financial resources to support all projects with a positive net present value, leading to the need to prioritize and select among them.

When Firms Do Not Have Sufficient Available Financing to Invest