If a Company Must Choose Between Two Mutually Exclusive Investment

question 88

Multiple Choice

If a company must choose between two mutually exclusive investment projects, the best general method to employ for decision-making purposes is:

• A) Cash-flow bailout.
• B) Cash-flow break-even.
• C) Net present value (NPV).
• D) Discounted payback.
• E) Accounting (book) rate of return (ARR), based on average investment over the life of each project.

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Definitions:

Unconscious Thoughts

Mental processes not immediately available to consciousness, influencing behaviors and perceptions without one's awareness.

Psychoanalyst

A therapist who practices psychoanalysis, a method of mental therapy developed by Sigmund Freud, focusing on exploring unconscious conflicts.

Free Association

A psychoanalytic technique in which the patient says whatever comes to mind to uncover subconscious thoughts and feelings.

Unconscious Mind

The part of the mind that contains desires, memories, and information that are not easily accessible through conscious thought.