Page 100 - 5.2 i. Manac Finance ITC Summarised Notes
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CAPITAL INVESTMENT APPRAISAL
Capital Rationing
Example:
The following details relate to the projects:
PI = PV
Cost
If there is no capital rationing:
Accept both A and B: The project has a positive NPV (PI greater than 1)
Do not accept C: The project has a negative NPV (PI less than 1)
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