What is capital rationing, Financial Management

Assignment Help:

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

Capital rationing is the practice of putting dollar limits on what will be invested in new capital budgeting projects.  Private corporations, partnerships and Proprietorships are in a position to do whatever the owners wish.  It can be disputed, but, that for a publicly traded corporation capital rationing may not be steady with maximizing the value of the firm.  This is because various value adding projects may be rejected if they would cause the firm to go beyond its self imposed capital rationing limit. 

 


Related Discussions:- What is capital rationing

currency options, Do you guys provide Currency Options assignment help? I ...

Do you guys provide Currency Options assignment help? I need writing a report on Currency Options and it is about 2000 words. Let me know. I need to buy your solution.

Equity theory, Equity Theor y This theory proposes that indivi...

Equity Theor y This theory proposes that individuals measure their out- comes/input ratio. Equity theory distinguish that inspiration is not the outcome of an absolute

What is the investment evaluation, What is the Investment evaluation I...

What is the Investment evaluation Investment evaluation the primary purpose of measuring the cost of capital is its use as a financial standard evaluating investment projects

Management of working capital, Q. Management of Working Capital? Workin...

Q. Management of Working Capital? Working capital, in general practice, refers to the excess of current assets over current liabilities. Management of working capital therefore

What are the types of inventory cost, What are the types of Inventory cost?...

What are the types of Inventory cost? Explain the elements of inventory cost also. Types: 1. Ordering cost    2. Holding cost Elements: 1. Unit cost  2. Reordering

T - account of the banking system - equilibrium, Suppose that the Fed buys ...

Suppose that the Fed buys $1 million of bonds from the First National Bank. If the First National Bank and all other banks use the resulting increase in reserves to purchases bonds

Net present value, What is Net Present Value? Describe please.

What is Net Present Value? Describe please.

Break even sales, given just the sales and profit values, how is the break-...

given just the sales and profit values, how is the break-even sales calculated?

What are the weaknesses of the traditional approach, What are the Weaknesse...

What are the Weaknesses of the traditional approach The traditional approach to the scope of finance function evolved during 1920s and 1930s and dominated academic during 40's

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