{"id":53153,"date":"2024-04-15T23:49:53","date_gmt":"2024-04-15T23:49:53","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=53153"},"modified":"2024-04-15T23:49:53","modified_gmt":"2024-04-15T23:49:53","slug":"projects-which-are-mutually-exclusive-but-different-on-scale-of-production-or-time-of-completion-then-the","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/projects-which-are-mutually-exclusive-but-different-on-scale-of-production-or-time-of-completion-then-the\/","title":{"rendered":"Projects which are mutually exclusive but different on scale of production or time of completion then the"},"content":{"rendered":"

[amp_mcq option1=”external return method” option2=”net present value of method” option3=”net future value method” option4=”internal return method” correct=”option2″]<\/p>\n

The correct answer is: B. net present value of method<\/strong><\/p>\n

The net present value (NPV) method is a capital budgeting technique that calculates the present value of a project’s future cash flows, and compares it to the project’s initial investment. If the NPV is positive, the project is considered to be financially feasible.<\/p>\n

The NPV method is a useful tool for comparing mutually exclusive projects, because it takes into account the time value of money. This means that projects with larger cash flows in the future are not necessarily more valuable than projects with smaller cash flows in the present.<\/p>\n

The other options are not as appropriate for comparing mutually exclusive projects. The external return method is a profitability index that compares a project’s return to its initial investment. However, it does not take into account the time value of money. The net future value method is a capital budgeting technique that calculates the future value of a project’s cash flows. However, it does not take into account the time value of money. The internal return method is a capital budgeting technique that calculates the rate of return on a project’s investment. However, it does not take into account the project’s initial investment.<\/p>\n

In conclusion, the NPV method is the most appropriate tool for comparing mutually exclusive projects. It takes into account the time value of money, and it is a profitability index.<\/p>\n","protected":false},"excerpt":{"rendered":"

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