Which of the following tools is suitable for choosing between mutually exclusive projects?
A) Profitability Index
B) IRR
C) MIRR
D) NPV

Question

Quizplus · Accepted Answer

NPV is the most suitable tool for choosing between mutually exclusive projects as it takes into consideration the time value of money and provides a dollar amount of the project's net benefit or loss. It helps in comparing the projects by determining which one will generate a greater return on investment. Profitability index and IRR can also be used for this purpose, but NPV is the most widely used and reliable tool. MIRR is not suitable for choosing between mutually exclusive projects.

Which of the Following Tools Is Suitable for Choosing Between