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You Know That Two Mutually Exclusive Projects Are of Different

Question 72

Multiple Choice

You know that two mutually exclusive projects are of different sizes.The smaller project is known to have a positive NPV.Which one of these accurately describes a method of properly determining which one,if either,project should be accepted?


A) Select the project with the higher internal rate of return
B) Accept the project with the shorter payback period
C) Accept the larger project if the incremental IRR exceeds the discount rate
D) Select the project with the higher profitability index
E) Accept the smaller project without any further analysis

Correct Answer:

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