A firm with limited dollars available for capital expenditures is subject to

Question

Quizplus · Accepted Answer

Capital rationing refers to a situation where a firm has limited funds and must prioritize which capital expenditures to undertake. This is the most relevant term of the options presented to the situation described. Choice A (mutually exclusive projects) refers to situations where undertaking one project precludes undertaking others, but this may not necessarily be related to capital constraints. Choice C (working capital constraints) refers to limitations on a firm's ability to meet short-term operating expenses and is not directly related to capital expenditures. Choice D (capital dependency) is not a commonly used term and doesn't accurately describe the situation presented.

A Firm with Limited Dollars Available for Capital Expenditures Is