The fundamental idea behind comparison of mutually exclusive projects on the basis of incremental IRR is
A)different fractions of investments are associated with different levels of productivity.
B)all investments are non-simple.
C)some investments are not productive.
D)multiple IRRs.
E)high uncertainty.

Question

Quizplus · Accepted Answer

The fundamental idea behind comparing mutually exclusive projects based on incremental IRR is that different fractions of investments are associated with different levels of productivity. This means that by comparing the incremental cash flows and IRRs, one can identify which project incrementally offers the best return for the additional investment.

The Fundamental Idea Behind Comparison of Mutually Exclusive Projects on the Basis