An unlimited funds environment assumes that the company can raise the funds it wants for all profitable projects simply by paying the required rate of return.
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3. BASIC PRINCIPLES OF CAPITAL BUDGETING the first project or new economic conditions are favorable. If the results of the first project or new economic conditions are not favorable, you do not invest in the second project.
Unlimited funds versus capital rationing —<span>An unlimited funds environment assumes that the company can raise the funds it wants for all profitable projects simply by paying the required rate of return. Capital rationing exists when the company has a fixed amount of funds to invest. If the company has more profitable projects than it has funds for, it must allocate the funds to achieve
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