Capital Rationing Question:

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What is Capital Rationing?

Capital Rationing Interview Question
Capital Rationing Interview Question

Answer:

Capital Rationing is the business decision which is used to place restriction on the amount available to spend on new investments or projects. It restricts the channels of outflow of funds by restricting the number of new projects. Small projects are better manageable by the companies and related to the specific sections of budget.

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Explain what is the normal procedure followed for Capital Rationing?Tell me what methods are used to ascertain the risk in capital budgeting decisions?