When capital rationing exists,the divisibility of projects is ignored and projects are funded in order of their PI's or IRR's.

Question

Quizplus · Accepted Answer

When capital rationing exists, the divisibility of projects becomes important as funds are limited. Therefore, projects may not be funded solely based on their PI's or IRR's, but rather based on the combination of the magnitude and feasibility of the project.

When Capital Rationing Exists,the Divisibility of Projects Is Ignored and Projects