The situation where a firm accepts projects to the point where the return on the last project accepted is just equal to or greater than the firm's required rate of return (IRR  k at the margin)is called capital rationing.

Question

Quizplus · Accepted Answer

Capital rationing refers to the situation where a firm limits its investments due to budget constraints, not when it accepts projects until the IRR equals the required rate of return.

The Situation Where a Firm Accepts Projects to the Point