The objective in solving capital rationing problems is to:

A) accept all projects with a PI greater than 1.1.
B) maximize the average IRR of the projects that are accepted.
C) maximize the total NPV of the projects that are accepted.
D) minimize the firm's cost of capital.

Capital Rationing

Capital rationing is a strategy where companies limit or restrict their capital investments due to budgetary constraints.

Total NPV

The sum of the net present values of a series of cash flows, which can indicate the overall net benefit of a series of potential investments or projects.

Maximize

To increase a particular outcome or variable to its highest possible value within a given set of constraints.