Unformatted text preview: profitable out of seven projects but if company has limited cash of $ 1 million only. With this money, company can use capital rationing technique. Under this technique, if company sees that First and third proposal’s profitability index is high than second, then they will select only two projects combination out of three projects. Read also second example of capital rationing ....
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- Fall '10
- Investing, capital rationing, Capital Budgeting Techniques.