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Placing limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on the entire capital budget or parts of it.
What else can I help you with?
What is meant by ROCE?
return on capital employed
What do you meant by prefernce share capital?
Preference share capital means share capital which have preference over all other kind of share capital in term of profit and clearance at the time of dissolution of business.
What decision criteria should managers use in selecting projects when there is not enough capital to invest in all available positive NPV projects?
Profitability index criteria can be used to select projects when a capital rationing situation exists, with the highest profititibility index from specified projects being the goal.
What is meant by efficiency continuum?
The efficiency continuum refers to capital markets. Within a capital market, if something is reasonable and efficient to the market, it is said to be on the efficiency continuum.
What is meant by loan capital?
short term and long term liabilities, which have due dates and the interest is paid. for example , debentures. compnay raises funds by issuing debentures and thes funds are loan capital. which means capital raised by loan.
What does capital rationing assumes?
a limited amont of capital is available
What is hard capital rationing?
A capital budget to which a company must adhere. A company may engage in hard capital rationing if it has limited resources and has allocated them in such a way as to allow little or no room for error. A project that goes over budget under hard capital rationing may land the company in trouble.
Why did rationing start in world war 2?
Due to the Germans covering the sea this meant that Britain could not ship in any resources such as food. This meant that we were low on food and therefore rationing was compulsory.
How are projects selected under capital rationing?
on the basis of projects having higher npv
What is capital rationing?
The Act of putting restrictions on investing new capital requirements by making the availability dearer at the high rates of interest/discounting.
When hard capital rationing exist project may be accurately evaluated by use of what?
Profitability Index
What does the capital of America do?
The capital of any country is meant for administration. The capital of America is also meant for the same purpose.
What did Britain have rationing ww2?
The war meant that we couldn't safely import many products. With the limited amounts of produce available, rationing was the only way to make sure people didn't 'stockpile' items.
What is meant by the term capital cost?
the capital cost is the exact price
Rationing?
the act of rationing
What is the capital of barbadas?
Barbadás in Spain is a municipality. If you meant Barbados, the capital is Bridgetown.
What is the capital of Aman?
There is no country named 'Aman'. Perhaps you meant Oman in the Arabian Peninsula, with a capital named Muscat. Or maybe you meant Amman, which is actually a capital city of the country of Jordan.
