You Are Considering the Following Two Mutually Exclusive Projects

question 43

Multiple Choice

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value. Required rate of return 10% 13%
Required payback period 2.0 years 2.0 years
Based upon the profitability index (PI) and the information provided in the problem,you should:

• A) accept both project A and project B.
• B) accept project A and reject project B.
• C) accept project B and reject project A.
• D) reject both project A and project B.
• E) disregard the PI method in this case.

---

Definitions:

Spin Patterns

The distinct orientations and arrangements of spins (magnetic moments) of particles, often studied in quantum physics and material science.

Angle Of Declination

The angle between the geographic true north and the magnetic north at a particular location, relevant in navigation and compass readings.

True North

The direction along the Earth's surface towards the geographic North Pole.

Magnetic North

The direction in which the north end of a compass needle or other freely suspended magnet will point, driven by the Earth's magnetic field.