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In mutually exclusive projects, project which is selected for comparison with others must have
- Ahigher net present value
- Blower net present value
- Czero net present value
- Dall of above
Correct answer: A
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CCommunity
higher net present value
In mutually exclusive projects, project which is selected for comparison with others must have higher net present value. A positive net present value indicates that the projected earnings generated by a project or investment - in present dollars - exceeds the anticipated costs, also in present dollars. It is assumed that an investment with a positive NPV will be profitable, and an investment with a negative NPV will result in a net loss.
In mutually exclusive projects, project which is selected for comparison with others must have higher net present value. A positive net present value indicates that the projected earnings generated by a project or investment - in present dollars - exceeds the anticipated costs, also in present dollars. It is assumed that an investment with a positive NPV will be profitable, and an investment with a negative NPV will result in a net loss.