The Acceptance Criterion for Independent Projects Is to Choose the Project

question 7

Multiple Choice

The acceptance criterion for independent projects is to choose the project with:

• A)the highest net present value.
• B)the highest internal rate of return for mutually exclusive projects.
• C)the lowest internal rate of return for independent projects.
• D)the lowest net present value.

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Definitions:

Net Income

The total earnings of a company after deducting all expenses and taxes from total revenue.

Drawings

Amounts withdrawn by the owner(s) of a business for personal use.

FASB

The Financial Accounting Standards Board (FASB) is a private organization that establishes financial accounting and reporting standards for companies and nonprofit organizations in the United States.

SEC

Stands for the Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry and protecting investors.