Define capital rationing, Financial Management

Assignment Help:

What is capital rationing?  Should a firm practice capital rationing?  Why?

The term Capital rationing is the practice of setting dollar limits on what will be invested in new capital budgeting projects.  Partnerships, Proprietorships, and private corporations are in a position to do anything the owners wish.  Though it can be argued, that for a publicly traded corporation capital rationing may not be consistent along with maximizing the value of the firm.  This is as some value adding projects might be rejected if they would cause the firm to exceed its self forced capital rationing limit.


Related Discussions:- Define capital rationing

Time value of money, Ask quSteve and Ed are cousins who were both born on t...

Ask quSteve and Ed are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve on his 20th

State the several goals for the organisation, State the several goals for t...

State the several goals for the organisation As there could be several goals for the organisation, we must try and summarise theorganisational goals in financial terms so that

Valuation of shares , Example based on Valuation of Shares Share capit...

Example based on Valuation of Shares Share capital details & Types of Share Hatsun Agro private limited (HAPL) as on March 2008 had a total authorized share capital worth

Credit limit decision-bajaj electronics company case study , how would you ...

how would you judge the potential profit of bajaj electronics on the first year of sales to booth plastics and give your suggestion regarding credit limit.Should it be approved or

Routine functions, Routine functions For the efficient execution of the...

Routine functions For the efficient execution of the managerial finance functions, routine functions have to be executed. Such decisions concern procedures and systems and incl

Explain the definition of arbitrage, Give a full definition of arbitrage. ...

Give a full definition of arbitrage. Answer:  Arbitrage can be illustrated as the act of concurrently buying and selling the same or equivalent assets or commodities for the aim

Decision table, drow decision table of financee managment system

drow decision table of financee managment system

State the exam technique for analysing performance, Exam technique for anal...

Exam technique for analysing performance The below steps must be adopted when answering a question on analysing performance: Step 1    Review figures as they are and commen

Financial analysis for anthony''s orchard, The Final Project for this modul...

The Final Project for this module is a consultancy report to Anthony’s Orchard, an expanding apple orchard and distributor. The company has been entertaining the idea of expanding

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd