You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value. Required rate of return 10% 13%
Required payback period 2.0 years 2.0 years
Based on the net present value method of analysis and given the information in the problem,you should:
A) accept both project A and project B.
B) accept project A and reject project B.
C) accept project B and reject project A.
D) reject both project A and project B.
E) accept whichever one you want as they represent equal opportunities.

Question

You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value.  Required rate of return 10% 13%
Required payback period 2.0 years 2.0 years
Based on the net present value method of analysis and given the information in the problem,you should:
A) accept both project A and project B. 
B) accept project A and reject project B. 
C) accept project B and reject project A. 
D) reject both project A and project B. 
E) accept whichever one you want as they represent equal opportunities.

Quizplus · Accepted Answer

The Answer of You are considering the following two mutually exclusive projects. Both projects will be depreciated using straight-line depreciation to a zero book value over the life of the project. Neither project has any salvage value.  Required rate of return 10% 13%
Required payback period 2.0 years 2.0 years
Based on the net present value method of analysis and given the information in the problem,you should:
A) accept both project A and project B. 
B) accept project A and reject project B. 
C) accept project B and reject project A. 
D) reject both project A and project B. 
E) accept whichever one you want as they represent equal opportunities.

You Are Considering the Following Two Mutually Exclusive Projects