When Evaluating Capital Projects, the Decisions Using the NPV Method

question 13

Multiple Choice

When evaluating capital projects, the decisions using the NPV method and the IRR method will agree if:

• A) the projects are independent.
• B) the cash flow pattern is conventional.
• C) the projects are mutually exclusive.
• D) both a and b.

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Definitions:

Oligopoly Behavior

Strategic actions by firms in a market where a few dominant firms interact, leading to solutions and outcomes that depend on the choices of the other market participants.

Prisoner's Dilemma

The Prisoner's Dilemma is a standard example of a game analyzed in game theory that shows why two completely rational individuals might not cooperate, even if it appears that it is in their best interest to do so.

Collude

When two or more parties come together to limit open competition by deceiving or misleading others about their rights and obligations.

Uncertain

Lacking predictability, assurance, or clarity about outcomes or consequences.