When projects are mutually exclusive, selection should be made according to the project with the:
A) longer life.
B) larger initial size.
C) highest IRR.
D)highest NPV.

Question

Quizplus · Accepted Answer

In this scenario, the best choice is the project with the highest NPV because it is an indicator of the degree of value created by the project. NPV incorporates both the value of future cash inflows and the cost of capital, making it the most comprehensive measure of a project's profitability. Therefore, selecting the project with the highest NPV will result in the most profitable investment.

When Projects Are Mutually Exclusive, Selection Should Be Made According