In case of unequal-lived, mutually exclusive projects, the use of net present value to select the better project results in an incorrect decision.

Name: In case of unequal-lived, mutually exclusive projects, the use of net present value to select the better project results in an incorrect decision.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Net present value assumes equal project lives, and thus cannot accurately compare projects with unequal lives. In such cases, other methods such as equivalent annual cost should be used.

In Case of Unequal-Lived, Mutually Exclusive Projects, the Use of Net