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1 0 - 2 8 . ( Capital rationing ) Kanye Company Ltd . is considering five capital investment proposals for which the total funds
Capital rationing Kanye Company Ltd is considering five capital investment proposals for which the total funds available are limited to a maximum of $ million. The projects are independent and have the following costs and profitability indexes associated with them:
tablePROJECTCOST,PROFITABILITY INDEXA$ million,B$ million,C$ million,D$ million,E$ million,
a Under strict capital rationing, which projects should be selected?
b What problems are there with capital rationing?
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