When a firm is facing capital rationing which of the following is true?
A) the cost of capital is no longer the appropriate opportunity cost.
B) firms can fully rely on either IRR or NPV as a criterion.
C) PIs are often useful to conclude on the optimal solution.
D) the investment decision should be based on which combination of projects generates the highest total NPV, regardless of the cost of the investment.
Correct Answer:
Verified
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