Which of the Following May Be TRUE Regarding Mutually Exclusive

question 28

Multiple Choice

Which of the following may be TRUE regarding mutually exclusive capital budgeting projects?

• A)There is need for only one project,and both projects can fulfill that current need.
• B)By using funds for one project,there are not enough funds available for the other project.
• C)There is a scarce resource that both projects would need.
• D)All of the above

---

Definitions:

Discounting

The process of determining the present value of a payment or a stream of payments that is to be received in the future.

Compounding

The process whereby interest is added to the principal sum, so that from that moment on, the interest that has been added also earns interest.

Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded, with price on the vertical axis and quantity on the horizontal axis.

Loanable Funds

The money available for borrowing in the financial markets, determined by savings and investments.