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1 FINANCE MCQS

The process of selecting projects that are most likely to be profitable when capital is limited is called ____________?

  • Capital Structure
  • Debt Structure
  • Asset Structure
  • Capital Rationing
Correct Answer: D. Capital Rationing

Detailed Explanation

Capital rationing is a financial strategy used when a company has limited funds but multiple investment opportunities. In this situation, the company selects the projects that offer the highest potential return or profitability. This ensures that scarce resources are allocated to projects that create maximum value for shareholders.

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