Projects which are mutually exclusive but different on scale of production or time of completion then the___________?
Correct answer: B. Net present value of method
- A. External return method
- B. Net present value of method
- C. Net future value method
- D. Internal return method
Explanation
For mutually exclusive projects with different scales or completion times, net present value provides a common present-value basis for comparison. The internal rate of return can rank such projects misleadingly when their size or timing differs.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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