- 5 Marks
FM – Nov 2020 – L2 – Q4b – Capital rationing
Distinguish between soft and hard capital rationing and provide practical ways to deal with capital rationing.
Question
In the coming years, the company is likely to face restrictions on financing for capital investments.
Required:
i) Distinguish between soft capital rationing and hard capital rationing. (2 marks)
ii) Advise the managers of the company on THREE (3) practical ways of dealing with capital rationing. (3 marks)
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