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16 March, 14:14

Kyle Electric has three positive net present value opportunities. Unfortunately, the firm has not been able to find financing for any of these projects. Which one of the following terms best describes the firm's situation?

A. Sensitivity analysis.

B. Capital rationing.

C. Soft rationing.

D. Contingency planning.

E. Sunk cost

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Answers (1)
  1. 16 March, 14:22
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    B. Capital rationing.

    Explanation:

    If Kyle Electric has three positive net present value opportunities and unfortunately, the firm has not been able to find financing for any of these projects. What most closely describes the firm's situation is capital rationing

    Capital rationing could be defined as a management approach to allocating available funds across multiple investment opportunities, which the company has accepted because those projects give a positive net present value. This allocation is done because the company does not have money for all the projects
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