Capital Rationing Occurs When

Multiple Choice

Capital rationing occurs when

A) Expected cash inflows do not materialize when the project is implemented
B) There are too few investment opportunities that can match or exceed the hurdle rate
C) Poor investment decisions cause limited resources to be spread thinly among the several projects undertaken
D) There are more investment opportunities meeting the hurdle rate than can be undertaken by the company
E) Sufficient funds for a capital investment cannot be obtained from a single source