Question

If a firm is evaluating two possible projects, both of which require the use of the same production facilities, and taking one project means that we cannot take the other, these projects would be considered _______________.

Answer 1

Complete/Correct Question:

If a firm is evaluating two possible projects, both of which require the use of the same production facilities, and taking one project means that we cannot take the other, these projects would be considered ___.

A. Mutually exclusive

B. Interdependent

C. Independent

D. Co-dependent

Answer:

A, Mutually exclusive

Explanation:

When two events are impossible to come together or coincide, the events are called a mutually exclusive event.

In simple terms, a mutually exclusive event is one that stands alone. No other event can go alongside it.

Just like in the question, since the two projects require the use of the same production facilities, only one project can be taken up at once. This makes each of the products mutually exclusive and means that one project has to go for the other project to happen.

Cheers.