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Capital Rationing is placing restrictions on new investments by a firm. Using firms implement capital rationing when their past returns from investments were lower than

Capital Rationing is placing restrictions on new investments by a firm. Using firms implement capital rationing when their past returns from investments were lower than they expected them to be. Two types of Capital Rationing are hard and soft. Hard capital rationing is a company that struggles to raise additional funds, usually arises from an external need to reduce spending.

What tools can managers use to decide on the better project to invest in?

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