Capital rationing implies that

Question

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Capital rationing means that a firm has a limited amount of funds to allocate among various investment opportunities. Therefore, it implies that the firm cannot fund all available projects, and it has to prioritize and select the projects that offer the highest return on investment with the available resources. Option B and C are incorrect as capital rationing does not necessarily mean that funding needs and resources are equal or that capital will be allocated equally to all available projects. Option D is also incorrect as capital rationing is a well-established concept in corporate finance.

Capital Rationing Implies That