Which of the Following Criteria Should Be Used to Choose

question 39

Multiple Choice

Which of the following criteria should be used to choose a project if there is a conflict between two mutually exclusive projects?

• A) The project whose internal rate of return is higher than its modified internal rate of return should be chosen.
• B) The project whose internal rate of return is equal to the expected rate of return should be chosen.
• C) The project with a higher net present value (NPV) should be chosen.
• D) The project whose payback period is equal to the expected years required to recover the original investment should be chosen.
• E) The project whose discounted payback period is longer than its traditional payback period should be chosen.

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Definitions:

Postindustrial Societies

Societies that are characterized by an economy dominated by the service sector and information technology, rather than industrial manufacturing.

Financial Leverage

The use of borrowed capital (debt) in addition to equity to finance a company's assets, aiming to increase the return on equity.

Critical Decisions

Decisions of significant importance that often influence the direction or success of a particular strategy or organization.

Operations Management

The domain of management tasked with the development and management of production processes and revamping operational methods in the manufacturing of goods or services.