Capital rationing is when a company has limited resources, and it must find ways to reduce operating expenses in all of its divisions and units.

Question

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Capital rationing refers to the situation where a company has limited capital or investment funds and it must prioritize which investment projects to undertake. It does not necessarily mean reducing operating expenses in all divisions and units, although that may be one of the strategies employed to free up capital for investment opportunities.

Capital Rationing Is When a Company Has Limited Resources, and It