Capital Rationing Question:
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Tell me what "other" factors are taken into consideration while practicing capital rationing?


The factors that are influencing capital rationing decisions include both financial situations and management philosophy. Companies can limit capital spending by seeing the effect of NPV (net present value) or IRR (internal rate of return) on the overall budget amount. Other factors which are taken into consideration includes amount of funds that come from current operations and feasibility of acquiring capital.

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