Capital Budgeting Analysis of Mutually Exclusive Projects a and B

question 62

Multiple Choice

Capital budgeting analysis of mutually exclusive projects A and B yields the following: $\begin{array}{lll} & \text { Project A } & \text { ProjectB } \\\text { IRR } & 18 \% & 22 \% \\\text { NPV } & \$ 270,000 & \$ 255,000 \\\text { Payback Period } & 2.5 \mathrm{yrs} & 2.0 \mathrm{yss}\end{array}$ Management should choose:

• A) project B because most executives prefer the IRR method.
• B) project B because two out of three methods choose it.
• C) project A because NPV is the best method
• D) Either project because the results aren't consistent.

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Definitions:

Long-Term Care

The provision of any services required by persons who are dependent on others to meet their daily needs.

Longer-Term Care

Care services provided on a prolonged basis to individuals who need assistance with daily activities due to chronic illness, disability, or age-related conditions.

Basic Needs

Fundamental requirements that serve as the foundation for survival, including food, water, shelter, and clothing.

Care Institutions

Organizations or facilities that provide care services, such as healthcare, childcare, or support for the elderly and disabled.