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Both Projects A and B are acceptable as independent projects. However, the selection of either one...

Both Projects A and B are acceptable as independent projects. However, the selection of either one of these projects eliminates the option of selecting the other project. Which one of the following terms best describes the relationship between Project A and Project B? A. Mutually exclusive B. Conventional C. Multiple choice D. Dual return

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Answer #1

Conventional projects are when it takes certain amount of time to generate positive cash flow for the company after the initial negative cash flow.

Multiple choice projects are when company has many number of projects to select from the available option.

Dual return projects are have multiple Internal rate of return due to more than one negative cash flow.

Mutually exclusive projects are when company has to select only one project from the available projects. If company selects one project then the other projects are excluded from investment.

Therefore in this case the project A and project B are mutually exclusive projects since selection of say project A would lead to exclusion of project B for investment.

The correct answer is option (A)

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