If Projects Are Mutually Exclusive

question 85

Multiple Choice

If projects are mutually exclusive

• A) they can only be accepted under capital rationing.
• B) the selection of one alternative precludes the selection of other alternatives.
• C) the payback method should be used.
• D) only the net present value method can be used.

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Definitions:

Production Costs

The expenses incurred in the process of creating a product or service, including labor, materials, and overhead costs.

Taxes

Compulsory financial charges levied by a government on individuals, corporations, and transactions to fund public expenditures.

Oil Price

The cost per barrel of crude oil as determined by global markets.

Favorable Supply Shock

An unexpected event that increases the supply of a product or service, leading to a lower equilibrium price and/or an increase in the equilibrium quantity.