In the Case of Independent Projects

question 4

Multiple Choice

In the case of independent projects:

• A)the financial manager is responsible for choosing the average of these alternatives since only one can be chosen; selecting one project requires the selection of the other.
• B)they are to be evaluated based on their expected effect on net income; all such projects that enhance net income should be included in the firm's capital budget.
• C)the financial manager is responsible for choosing the best of these alternatives since only one can be chosen; selecting one project precludes the other from being undertaken.
• D)they are to be evaluated based on their past effect on shareholder wealth; all such projects that enhance shareholder wealth should be included in the firm's capital budget.
• E)none of the above statements are correct

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Definitions:

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Mastery Goals

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