The available capital funds are to be carefully allocated among competing projects by careful prioritization. This is called ____________.
A. capital positioning
B. capital structuring
C. capital rationing
D. capital budgeting
Answer: Option D
Solution (By Examveda Team)
The available capital funds are to be carefully allocated among competing projects by careful prioritization. This is called capital budgeting. Capital budgeting is the process a business undertakes to evaluate potential major projects or investments.This Question Belongs to Commerce >> Financial Management
The correct answer is:
C. capital rationing
Explanation: Capital rationing refers to the process of carefully allocating limited capital funds among competing projects by prioritizing them based on their potential returns and strategic importance. It involves selecting the best projects to invest in when the available capital is insufficient to fund all desirable projects. This ensures optimal use of scarce financial resources.