Capital rationing: Difference between revisions
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Leading to the <u>selective</u> acceptance only of positive net present value projects. | Leading to the <u>selective</u> acceptance only of positive net present value projects. | ||
(Rather than the acceptance of all positive [[net present value]] projects, which is the theoretical value-maximising response in the situation of the unlimited availability of additional capital at current market prices.) | (Rather than the acceptance of all positive [[net present value]] projects, which is the theoretical value-maximising response in the situation of the unlimited availability of additional capital at current market prices.) | ||
== See also == | == See also == | ||
* [[Net present value]] | * [[Net present value]] | ||
* [[Profitability index]] | * [[Profitability index]] | ||
Revision as of 12:23, 22 June 2016
A situation in which the total availability of capital to a business is limited.
Leading to the selective acceptance only of positive net present value projects. (Rather than the acceptance of all positive net present value projects, which is the theoretical value-maximising response in the situation of the unlimited availability of additional capital at current market prices.)
