General Studies · Capital Budgeting

When capital is rationed for one period only and projects are divisible, the firm should:

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Accept projects with the highest IRR
2Use Profitability Index (PI) ranking or linear programming✓
3Use NPV ranking exclusively
4Postpone all projects

Correct answer

Use Profitability Index (PI) ranking or linear programming

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When capital is rationed for one period only and projects are divisible, the firm should:

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When capital is rationed for one period only and projects are divisible, the firm should:

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