Capital Rationing - Revision history

Paulreed at 16:01, 13 November 2019

2019-11-13T16:01:15Z

← Older revision		Revision as of 10:01, 13 November 2019
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	If there are mutually exclusive projects, for instance you cannot do '''E''' if you do '''C''' then pursue the projects based upon the profitability index up to the Capital Rationing limit. There all combinations should be tried to determine the best combination. However, the combination must exactly equal the capital rationing limit.		If there are mutually exclusive projects, for instance you cannot do '''E''' if you do '''C''' then pursue the projects based upon the profitability index up to the Capital Rationing limit. There all combinations should be tried to determine the best combination. However, the combination must exactly equal the capital rationing limit.

	~~<comments/>~~
	[[Category:Finance]]		[[Category:Finance]]

2012-08-31T18:34:14Z

← Older revision		Revision as of 12:34, 31 August 2012
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	If there are mutually exclusive projects, for instance you cannot do '''E''' if you do '''C''' then pursue the projects based upon the profitability index up to the Capital Rationing limit. There all combinations should be tried to determine the best combination. However, the combination must exactly equal the capital rationing limit.		If there are mutually exclusive projects, for instance you cannot do '''E''' if you do '''C''' then pursue the projects based upon the profitability index up to the Capital Rationing limit. There all combinations should be tried to determine the best combination. However, the combination must exactly equal the capital rationing limit.

	<comments>		<comments/>
	[[Category:Finance]]		[[Category:Finance]]

2012-08-31T17:22:06Z

← Older revision		Revision as of 11:22, 31 August 2012
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	If there are mutually exclusive projects, for instance you cannot do '''E''' if you do '''C''' then pursue the projects based upon the profitability index up to the Capital Rationing limit. There all combinations should be tried to determine the best combination. However, the combination must exactly equal the capital rationing limit.		If there are mutually exclusive projects, for instance you cannot do '''E''' if you do '''C''' then pursue the projects based upon the profitability index up to the Capital Rationing limit. There all combinations should be tried to determine the best combination. However, the combination must exactly equal the capital rationing limit.

			<comments>
	[[Category:Finance]]		[[Category:Finance]]

2012-08-31T17:15:30Z

Non Divisble Projects

← Older revision		Revision as of 11:15, 31 August 2012
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	You can not build half an airliner so it may not be possible to invest partial sums. In that case you would add up the NPV's of Project Combinations that are at least but no more than $200. In that case Project B and D cost $200 million and return an NPV of $139.32m		You can not build half an airliner so it may not be possible to invest partial sums. In that case you would add up the NPV's of Project Combinations that are at least but no more than $200. In that case Project B and D cost $200 million and return an NPV of $139.32m

	*Note that the [IRR] would be of no use to us in a capital rationing		*Note that the [[IRR]] would be of no use to us in a capital rationing
	situation as it is not an absolute measure and cannot be used to rank		situation as it is not an absolute measure and cannot be used to rank
	projects.		projects.

2012-08-31T17:15:15Z

Non Divisble Projects

← Older revision		Revision as of 11:15, 31 August 2012
Line 152:		Line 152:
	You can not build half an airliner so it may not be possible to invest partial sums. In that case you would add up the NPV's of Project Combinations that are at least but no more than $200. In that case Project B and D cost $200 million and return an NPV of $139.32m		You can not build half an airliner so it may not be possible to invest partial sums. In that case you would add up the NPV's of Project Combinations that are at least but no more than $200. In that case Project B and D cost $200 million and return an NPV of $139.32m

	*Note that the IRR would be of no use to us in a capital rationing		*Note that the [IRR] would be of no use to us in a capital rationing
	situation as it is not an absolute measure and cannot be used to rank		situation as it is not an absolute measure and cannot be used to rank
	projects.		projects.

2012-08-31T17:14:43Z

Capital Rationing Decisions

@@ Line 144: / Line 144: @@
 |}
-To maximize the the capital you would take 100% of Project C plus invest the balance in Project E (about 80%). The NPV would be $79.26 plus 92.38*0.8 = $153.17
+To maximize the the capital you would take 100% of Project C plus invest the balance in Project E (about 80%). The NPV would be $79.26 plus 92.38*0.8 = $153.17.
 ==Limitations==

2012-08-31T17:04:00Z

Capital Rationing Decisions

← Older revision		Revision as of 11:04, 31 August 2012
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	\|-		\|-
	\|}		\|}

			To maximize the the capital you would take 100% of Project C plus invest the balance in Project E (about 80%). The NPV would be $79.26 plus 92.38*0.8 = $153.17

	==Limitations==		==Limitations==

2012-08-31T17:01:11Z

Capital Rationing Decisions

@@ Line 93: / Line 93: @@
 |35.32
 |92.38
 |}

2012-08-31T16:55:24Z

Capital Rationing Decisions

2012-08-31T16:55:07Z

Capital Rationing Decisions

@@ Line 73: / Line 73: @@
 |60
 |-
+|3
+|60
 |}