If faced with mutually exclusive capital expenditure proposals, a business will choose the alternative with the highest net present value.

Question

Quizplus · Accepted Answer

When faced with mutually exclusive capital expenditure proposals, businesses typically choose the alternative with the highest net present value (NPV) because it represents the option that is expected to add the most value to the firm, taking into account the time value of money.

If Faced with Mutually Exclusive Capital Expenditure Proposals, a Business