Mutually exclusive projects are those whose cash flows are constant over a specified period of time and more than one project needs to be accepted in order to implement capital budgeting decisions.

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Mutually exclusive projects are those where accepting one project precludes the acceptance of another project. Therefore, only one project can be accepted out of the options available. This is different from projects with independent cash flows, where multiple projects can be accepted without impacting each other.

Mutually Exclusive Projects Are Those Whose Cash Flows Are Constant