When a firm cannot invest in every positive NPV project because of limited funds,this is known as:

Question

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Capital rationing occurs when a firm has limited funds to invest in multiple positive NPV projects. This often requires the company to prioritize projects based on their potential return or to seek additional external funding sources. Capital budgeting refers to the process of evaluating and selecting investment opportunities, while capital investing and financing refer more broadly to the overall management of a company's financial resources.

When a Firm Cannot Invest in Every Positive NPV Project