Project January Has a NPV of $50,000, Project December Has

question 30

Multiple Choice

Project January has a NPV of $50,000, project December has a NPV of $40,000. Which of the following circumstances could make it possible to choose December over January?

• A) January has a shorter payback period.
• B) The projects are mutually exclusive.
• C) The projects have unequal lives.
• D) The projects are mandated.

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Definitions:

Inventory Shortages

Situations where the actual inventory count is less than what is recorded on the books, indicating possible issues such as theft or errors.

Volatile Times

Periods characterized by high levels of uncertainty, unpredictability, or instability, often referring to economic or financial market conditions.

Lean Accounting System

An accounting practice aimed at reducing waste and improving financial control by aligning accounting processes with lean manufacturing principles.

Fewer Transactions

A situation where a business or an individual engages in a lesser number of financial exchanges or activities within a given period.