When two or more normal ____ projects are under consideration, the profitability index, the net present value, and the internal rate of return methods will yield identical accept/reject signals.
A) coincident
B) mutually exclusive
C) independent
D) None of these are correct

Question

Quizplus · Accepted Answer

The profitability index, net present value and internal rate of return methods will yield identical accept/reject signals only when two or more independent normal projects are under consideration. In case of mutually exclusive projects, these methods may yield different signals and a decision has to be made based on other criteria such as risk, capital rationing, etc.

When Two or More Normal ____ Projects Are Under Consideration