If projects are mutually exclusive a. they can only be accepted under capital rationing. b. the...
If projects are mutually exclusive
a. they can only be accepted under capital rationing.
b. the selection of one alternative precludes the selection of other alternatives.
c. the payback method should be used.
d. only the net present value method can be used.
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If the projects are mutually exclusive then the selection of one alternative precludes the selection of other alternative. Since in case of mutually exclusive projects only one project can be chosen from the various alternative. It always prevent the other alternative.
So correct answer is b) the selection of one alternative precludes the selection of other alternative.
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