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    moni21's Avatar
    moni21 Posts: 1, Reputation: 1
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    #1

    Jun 16, 2009, 11:58 AM
    Capital Rationing?
    If a corporation has projects that will earn more than the cost of capital, should it ration capital?
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #2

    Jun 21, 2009, 04:54 AM

    Capital rationing considers whether the different projects divisible.

    Calculate the profitability index by comparing the NPV with the initial investment in each project and then choose the project(s) with the best ranking
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