When Ranking Two Mutually Exclusive Investments with Different Initial Amounts

question 101

Multiple Choice

When ranking two mutually exclusive investments with different initial amounts but approximately the same useful life, and assuming no capital rationing, management should give priority to the project:

• A) That generates cash flows for the longer period of time.
• B) Whose net after-tax cash flows equal the initial investment outlay.
• C) That has the greater accounting rate of return (ARR).
• D) Whose cash flows vary the least.
• E) That has the higher net present value (NPV).

---

Definitions:

Suicidal Ideation

Thougths of engaging in behavior intended to end one's life, ranging from considering or planning suicide to actually attempting it.

Imbalanced Nutrition

A state where nutritional intake does not match the body's needs, leading to either undernutrition or overnutrition.

Strict Confidence

Ensuring that sensitive information is kept secret and only shared with authorized individuals or parties.

Assessment Interview

A structured conversation used to gather information from individuals to understand their needs, skills, and abilities.