1. How does the presence of real options influence the capital budgeting decision?
2. Describe a typical capital budgeting decision process.
3. Are decisions made solely on the basis of quantitative factors? Explain your answer.
4. What is capital rationing?
5. From a financial perspective, how are projects chosen when capital rationing exists?
6. What is the profitability index, and why is it useful under capital rationing?