Project a and B Both Have Positive NPVs

question 80

Multiple Choice

Project A and B both have positive NPVs.If A and B are mutually exclusive,others thing held constant,which project will management accept?

• A)Management will accept the project with the lower NPV.
• B)Management will accept the project with the higher NPV.
• C)Management will accept both A and B since they both have positive NPVs.
• D)When projects are mutually exclusive, the NPV rule is ignored and neither project is accepted.

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Definitions:

Fishing

The activity of catching fish for commercial, recreational, or subsistence purposes.

Total Allowable Catch (TAC)

The overall limit set by a government or a fisheries commission on the total number of fish or tonnage of fish that fishers collectively can harvest during some particular time period. Used to set the fishing limits for individual transferable quotas (ITQs).

Pacific Halibut

A species of flatfish found in the North Pacific Ocean, known for its commercial and recreational value.

ITQs

Individual Transferable Quotas, a common market-based tool used to regulate fishing efforts and conserve fish stocks by allocating specific catch limits to fishers.