If There Is a Conflict Between Mutually Exclusive Projects Due

question 69

Multiple Choice

If there is a conflict between mutually exclusive projects due to the IRR,one should:

• A)drop the two projects immediately.
• B)spend more money on gathering information.
• C)depend on the NPV as it will always provide the most value.
• D)depend on the AAR because it does not suffer from these same problems.
• E)None of the above.

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Definitions:

Cash Budgeting

The process of estimating future cash inflows and outflows to determine the cash position and to plan for any surplus or deficit.

Financial Statements

Written records that convey the business activities and the financial performance of a company.

GAAP

Generally Accepted Accounting Principles, which are a set of rules and standards used in the United States for financial reporting.

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.