When Mutually Exclusive Projects Have Different Lives, the Project Which

question 86

Multiple Choice

When mutually exclusive projects have different lives, the project which should be selected will have the:

• A)Highest IRR
• B)Longest life
• C)Lowest equivalent annual cost
• D)Highest NPV, discounted at the opportunity cost of capital

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Definitions:

Intestate

The state of dying without having made a legal will, leading to the distribution of one's estate according to state or country laws.

Distributed

The process of allocating or dispersing items, resources, or information among multiple recipients or over various locations.

Constructive Trust

A legal remedy imposed by a court to prevent unjust enrichment, transforming the holder of property into a trustee for the benefit of another party.

Resulting Trust

A trust that arises by implication of law when property is transferred under circumstances suggesting that the transferee was not intended to have the beneficial interest.