You Are Considering the Following Two Mutually Exclusive Projects

question 20

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. Should you accept or reject these projects based on the average accounting return?

• A)accept Project A and reject Project B
• B)reject Project A and accept Project B
• C)accept both Projects A and B
• D)reject both Projects A and B
• E)You cannot make this decision based on the information provided.

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Definitions:

Electrons

Subatomic particles with a negative charge, found orbiting the nucleus of an atom, involved in chemical bonds and electrical conductivity.

Enthalpy

A thermodynamic quantity equivalent to the total heat content of a system, representing the amount of energy needed to create a system plus the work needed to make room for it in its environment.

Free Energy

A thermodynamic quantity that represents the amount of work that can be performed by a system at a constant temperature and pressure.

Entropy

Disorderliness; a quantitative measure of the amount of the random, disordered energy that is unavailable to do work.