General Studies · Capital Budgeting
When there is single-period capital rationing, the most appropriate method for making investment decisions is to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Choose all projects with a positive NPV
- 2Group projects together to allocate available funds and select the combination with the highest total NPV✓
- 3Choose the project with the highest IRR only
- 4Calculate IRR and select projects with the highest IRRs until funds are exhausted
Correct answer
Group projects together to allocate available funds and select the combination with the highest total NPV
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