In the Case of Independent Projects

question 19

Multiple Choice

In the case of independent 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.
• E)none of the above statements are correct

---

Definitions:

Account

A record summarizing all the transactions pertaining to a single item in the financial statements.

Days

The basic unit of time, equal to 24 hours, used to measure duration from one midnight to the next.

Interest Earned

The amount of money made on an investment over a certain period of time due to interest.

Account

A record or arrangement by which an individual or organization keeps track of their financial transactions and balances with a financial institution.