Answer:
Soft rationing
Explanation:
Soft rationing is when a company reduces the capital funds it uses for it business processes. This can occur as a result of internal factors like shareholders not wanting to have a high debt profile for the company, wanting to raise capital slowly, and the uncertainty of future funding needs (some future project may be more important than present ones).
In this scenario Brubaker & Goss management has decided to allocate the available funds based on the profitability index of each project since the company has insufficient funds to fulfill all of the requests.
This is using soft rationing to limit use of funds.
Answer:
E. Soft rationing.
Explanation:
This term explains when firms are said to limit themselves of the amount of capital to be dished to business investments; this is said to occur for a certain period. Reasons for this could be opinion from promoters that if they raise too much capital too soon, they may lose control of the firm’s operations. Certain dealings could
force management to be worried that if too much debt is raised it may exponentially increase the risk raising the opportunity cost of capital.
In as much as their are also different other rationing,this explains when the firm itself limits the amount of capital that is going to be used for investment decisions in a given time period.
