Brubaker & Goss has received requests for capital investment funds for next year from each of its five divisions. All requests represent positive net present value projects. All projects are independent. Senior 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. Management is following a practice known as: a. scenario analysis.
b. sensitivity analysis.
c. leveraging.
d. hard rationing.
e. soft rationing.

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.

answer; i believe the correct answer is (business necessity defense;

forbearance of student loan payments. under forbearance, your loan payments are postponed (or reduced) but interest continues to accrue during the period of forbearance. if you don't pay the interest during that period, the interest may be “capitalized,” which means it is added to your principal balance.