Question

4. What does it mean to say an investment is independent and not mutually exclusive?

4. What does it mean to say an investment is independent and not mutually exclusive?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution

Investments are said to be  independent if the cash flows of one project is not affected by the acceptance of other.On the other hand, in case of mutually exclusive projects the acceptance of one project adversely impacts the cashflows of other.

Thus in other words,in case of independent projects any number of projects can be chosen from the chioices,while in case of mutually exclusive projects ,for example 2 mutually exclusive projects only 1 can be chosen out of the 2.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Alternatives are usually of two types: mutually exclusive and independent. Explain the meaning of mutually exclusive...
Alternatives are usually of two types: mutually exclusive and independent. Explain the meaning of mutually exclusive alternatives.
independent versus mutually exclusive projects?
independent versus mutually exclusive projects?
What are independent and mutually exclusive projects? How can you tell the difference?
What are independent and mutually exclusive projects? How can you tell the difference?
Mutually exclusive events also independent. True or False?
Mutually exclusive events also independent. True or False?
Prove: If A and B are mutually exclusive, and A and B are also independent, then...
Prove: If A and B are mutually exclusive, and A and B are also independent, then either A or B has probability zero.
A) DO NOT calculate IRR for projects that are: Conventional Nonconventional Independent Mutually exclusive B) What...
A) DO NOT calculate IRR for projects that are: Conventional Nonconventional Independent Mutually exclusive B) What is the internal rate of return for this project? Year Cash Flows 0 -1,000,000 1 300,000 2 300,000 3 300,000 4 600,000
Discuss the concepts of mutually exclusive events and independent events. List several examples of each type...
Discuss the concepts of mutually exclusive events and independent events. List several examples of each type of event from everyday life. If A and B are mutually exclusive events, does it follow that A and B cannot be independent events? Give an example to demonstrate your answer. Hint: Discuss an election where only one person can win the election. Let A be the event that party A's candidate wins, and let B be the event that party B's candidate wins....
Two mutually exclusive investment opportunities require an initial investment of $ 8million. Investment A then generates...
Two mutually exclusive investment opportunities require an initial investment of $ 8million. Investment A then generates $ 1.50 million per year in? perpetuity, while investment B pays $1.10 million in the first? year, with cash flows increasing by 3% per year after that. At what cost of capital would an investor regard both opportunities as being? equivalent?
What is meant by two mutually exclusive events? Give one example of two mutually exclusive events...
What is meant by two mutually exclusive events? Give one example of two mutually exclusive events and another example of two mutually nonexclusive events.
Calculate and choose project/s assuming that these two projects are (1) mutually exclusive OR (2) independent....
Calculate and choose project/s assuming that these two projects are (1) mutually exclusive OR (2) independent. NPV (WACC 6%) CFs Year A B 0 -2050 -4300 1 750 1500 2 760 1518 3 770 1536 4 780 1554
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT