When an Investment Decision Has to Be Made for Mutually

question 29

Multiple Choice

When an investment decision has to be made for mutually exclusive projects and source constraints

• A) the NPV rule prevails.
• B) the IRR rule prevails.
• C) the Payback rule prevails.
• D) the ROA rule prevails.

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Definitions:

Blank Indorsement

A signature by the holder on the back of a negotiable instrument, such as a check, without specifying a particular endorsee, thereby making the instrument payable to the bearer.

Qualified Indorsement

An indorsement on a negotiable instrument in which the indorser disclaims any contract liability on the instrument; the notation “without recourse” is commonly used to create a qualified indorsement.

Restrictive

Imposing limitations or conditions on use, action, or movement.

Bearer Instrument

A negotiable financial instrument that is payable to the holder or presenter.