In the Case of Mutually Exclusive Projects

question 124

Multiple Choice

In the case of mutually exclusive projects:

• A) the financial manager is responsible for choosing the average of these alternatives since only one can be chosen; selecting one project requires the selection of the other.
• B) they are to be evaluated based on their expected effect on shareholder wealth; all such projects that enhance shareholder wealth should be included in the firm's capital budget.
• C) the financial manager is responsible for choosing the best of these alternatives since only one can be chosen; selecting one project precludes the other from being undertaken.
• D) they are to be evaluated based on their past effect on shareholder wealth; all such projects that enhance shareholder wealth should be included in the firm's capital budget.

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Definitions:

Age of Viability

The stage of fetal development at which a fetus has a significant chance of survival outside the uterus, typically around 24 weeks gestation.

Prematurely

Happening before the normal or expected time.

Fetus

A developing mammal or human from the embryonic stage to birth, after major structures have been outlined.

Uterus

A female reproductive organ where a fertilized egg implants and grows during pregnancy.