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You Have a Choice Between Two Mutually Exclusive Investments

Question 101

Multiple Choice

You have a choice between two mutually exclusive investments. If you require a 14% return, which investment should you choose? You have a choice between two mutually exclusive investments. If you require a 14% return, which investment should you choose?   A)  Project B, because it has a smaller initial investment. B)  Project A, because it has a higher NPV. C)  Either one, because they have the same profitability indexes. D)  Project B, because it has the higher internal rate of return. E)  Project B, because it pays back faster.


A) Project B, because it has a smaller initial investment.
B) Project A, because it has a higher NPV.
C) Either one, because they have the same profitability indexes.
D) Project B, because it has the higher internal rate of return.
E) Project B, because it pays back faster.

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