Asked by Le'Aisha Marshall on Jul 17, 2024
Verified
The process by which management allocates available investment funds among competing capital investment proposals is termed capital rationing.
Capital Rationing
The process by which management allocates funds among competing capital investment proposals.
Capital Investment
Funds invested in a business with the intent to further its objectives, such as acquiring new assets or launching new ventures.
Investment Funds
Pooled funds from multiple investors used to collectively invest in securities such as stocks, bonds, or other assets, managed by professionals.
- Understand the concept of capital rationing and how it applies to investment decisions.
Verified Answer
MT
Marisia TuraganivaluJul 19, 2024
Final Answer :
True
Explanation :
This statement is true. Capital rationing refers to the process of allocating investment funds among various competing proposals when there is a limitation on the availability of funds. It is done to ensure that the available funds are utilized in the most effective and efficient manner.
Learning Objectives
- Understand the concept of capital rationing and how it applies to investment decisions.