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answer it asap plz ) What is Capital Rationing and when do firm resort to such decision? What are the two main types of Capital
answer it asap plz
) What is Capital Rationing and when do firm resort to such decision? What are the two main types of Capital Rationing? Provide answer with example (10 Marks) b) What the payback period on each of the following projects? Project A B Time 0 -5.000 - 1,000 -5,000 Cash Flow in Dollars 1 2 3 +1.000 +1,000 +3,000 0 +1.000 +2.000 +1.000 +1,000 +3,000 4 0 13,000 +5,000 1) Given that you wish to use the payback rule with cut off period of 2 years, which project will you accept? 2) If you use a cut off period of 3 years, which projects would you accept? 3) If the opportunity cost of capital is 10%, which projects have positive NPVS? 4) "Payback gives too much weight to cash flows that occur after the cutoff date" - Do you agree with this statement. Please explain in short Step by Step Solution
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