Asked by Caitlin Minton on Jun 03, 2024
Verified
Soft capital rationing is imposed by external factors,such as debt covenants.
Soft Capital Rationing
Internal limitations set by a company's management on the amount of funding allocated for new projects.
Debt Covenants
Agreements between a borrower and lender that stipulate certain conditions the borrower must adhere to, which can pertain to financial ratios, levels of income, or other financial benchmarks.
- Understand the concepts of soft and hard capital rationing and their effects.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
False
Explanation :
Soft capital rationing is imposed internally by a company's management, often as a strategic decision, rather than by external factors.
Learning Objectives
- Understand the concepts of soft and hard capital rationing and their effects.