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BlackZzzverrR [31]
3 years ago
12

When choosing between mutually exclusive projects, what is the best method to use?

Business
1 answer:
KIM [24]3 years ago
7 0

Answer:

Option C. The highest NPV is always the best option.

Explanation:

The reason is that IRR assumes that the reinvestment rate is also at IRR which is not a realistic assumption. The Net Present Value resolves this as it assumes that the reinvestment rate is cost of capital and hence is more better than IRR to appraise the project.

The decision rule in the Net present value method is that the project which has higher positive Net present value is regarded as best project among two mutually exclusive projects.

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<h3>What is an inference?</h3>

It should be noted that an inference simply means the conclusion that can be deduced from the information given.

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Specific moral values will impact a person on how he/she will respond to a particular situations at work and how deal with it while advancing career.

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7 0
11 months ago
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Promotional allowance

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I hope my answer helps you.

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3 years ago
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