The idea that a company may be unable to accept all projects that are expected to have positive NPVs due to the lack of funds is known as:

Question

Quizplus · Accepted Answer

Capital rationing refers to the situation where a company has limited funds to invest in all the projects that have positive NPVs. As a result, it has to restrict its capital expenditures to the most important projects or those that offer the highest returns. This is a common issue faced by companies with constrained financial resources, and it requires careful evaluation of projects to ensure that only the most valuable ones are undertaken.

The Idea That a Company May Be Unable to Accept