Which one of the following statements is correct when a firm faces hard rationing?
A) All positive net present value projects will be accepted.
B) Each division within a firm will be allocated an amount for capital expenditures that will be less than the total value of its positive net present value projects.
C) The firm does not have funds to finance any new projects.
D) The firm will fund only those projects that create value for its shareholders.
E) The firm will only finance the projects which have the highest profitability index values.
Correct Answer:
Verified
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