A company may not accept a new project with a positive net present value because of difficulties with hiring new staff and training them.Such limitation to investments is referred to as:
A)internal capital rationing.
B)capital rationing.
C)external capital rationing.
D)duration of resource constraints.

Question

Quizplus · Accepted Answer

Internal capital rationing occurs when a company sets its own limitations or restrictions on investments, typically due to resource constraints or other factors such as difficulties with hiring new staff and training them. This is different from external capital rationing, which refers to limitations imposed by external factors such as limited access to funding or regulatory constraints. Duration of resource constraints is not a recognized term in capital budgeting literature.

A Company May Not Accept a New Project with a Positive