--%>
Assignment Help - homework help

Capital rationing

Explain in brief capital rationing? What are reasons that a firm should practice capital rationing?

E

Expert

Verified

The Capital rationing is a practice of defining dollar limits on the basis of invested amount in the new capital budgeting projects. Private corporations, partnerships and proprietorships are in a position to do anything that owner desires. It can be discussed that for a publicly traded corporation capital rationing might not be reliable with maximizing the firm’s value. This is mainly due to some value adding projects might get rejected if they will make the firm to exceed self imposed capital rationing limit.

   Related Questions in Financial Management

  • Q : Investment opportunity schedule Explain

    Explain in brief: IOS (investment opportunity schedule). How can IOS (investment opportunity schedule) help financial managers in making business decisions?

    		•
  • Q : Factors considering in investing in

    Like an investor, what factors would you regard as before investing in the emerging stock market of a developing country? In emerging market stocks an investor needs to be concerned with the depth of the market and

    		•
  • Q : Functional form of coefficients in

    Explain the term functional form of coefficients in finite-difference methods.

    		•
  • Q : Basic operation of a currency futures

    Illustrates the basic operation of a currency futures market.A futures contract is an exchange-traded instrument along with standardized features demonstrating contract size & delivery date. Futures contracts are marked-to-market day by day

    		•
  • Q : Difference in cash budget and pro forma

    Explain the dissimilarities in a cash budget and pro forma financial statements? Why pro forma financial statements are not utilized to forecast cash requirements.

    		•
  • Q : Main motive behind the experience

    Explain the main motive behind the experience approach to forecasting?

    		•
  • Q : Explain validity in forms of

    Explain the validity in various forms of Efficient-market hypothesis.

    		•
  • Q : Question on unbiased predictor of

    The March 2000 Mexican peso futures contract contains a price of $0.11695. You believe the spot price will be $0.09550 in March. What speculative location would you enter into to try to profit from your beliefs? Compute your anticipated profits supposing yo

    		•
  • Q : Where can a profitable strategy exist

    Where can a profitable strategy exist?

    		•
  • Q : Difference between complete market and

    What are the difference between complete market and binomial model?

    		•