Two key reasons can prevent a business from proceeding with a large number of capital projects: cash insufficiency and hurdle rate.

Question

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Cash insufficiency means the business does not have enough liquid assets to fund the projects, while the hurdle rate is the minimum rate of return on a project that a business requires before it decides to invest. Both factors can limit the number of projects a business can undertake.

Two Key Reasons Can Prevent a Business from Proceeding with a Large