Asked by Abigail Dupont on Jun 26, 2024
Verified
Two projects which each _____ is an example of mutually exclusive projects.
A) Require an initial investment of $1.5 million.
B) Must occur during the same period of time.
C) Must start up in the same fiscal year.
D) Require the total use of the same limited economic resource.
E) Have differing internal rates of return.
Mutually Exclusive Projects
Situations where the acceptance of one project results in the rejection of another project due to constraints such as budget or resources.
Economic Resource
Assets or inputs that can be used in the production or offering of goods and services that have economic value.
Fiscal Year
A one-year period used for financial reporting and budgeting that may not align with the calendar year.
- Identify and differentiate between mutually exclusive and independent projects.
Verified Answer
DK
Deepakshi KalraJun 30, 2024
Final Answer :
D
Explanation :
Mutually exclusive projects are those that cannot be pursued simultaneously because they compete for the same resources. Choice D, "Require the total use of the same limited economic resource," directly implies that if one project is chosen, the other cannot proceed because they both require the same limited resource, making them mutually exclusive.
Learning Objectives
- Identify and differentiate between mutually exclusive and independent projects.