Matt is analyzing two mutually exclusive projects of similar size and has prepared the following data.Both projects have 5 year lives. Matt has been asked for his best recommendation given this information.His recommendation should be to accept:
A)project B because it has the shortest payback period.
B)project A and reject project B based on their net present values.
C)both projects as they both have positive net present values.
D)project B and reject project A based on their average accounting returns.
E)project B and reject project A based on both the payback period and the averageaccounting return.

Question

Matt is analyzing two mutually exclusive projects of similar size and has prepared the following data.Both projects have 5 year lives.  Matt has been asked for his best recommendation given this information.His recommendation should be to accept:
A)project B because it has the shortest payback period. 
B)project A and reject project B based on their net present values. 
C)both projects as they both have positive net present values. 
D)project B and reject project A based on their average accounting returns. 
E)project B and reject project A based on both the payback period and the averageaccounting return.

Quizplus · Accepted Answer

The Answer of Matt is analyzing two mutually exclusive projects of similar size and has prepared the following data.Both projects have 5 year lives.  Matt has been asked for his best recommendation given this information.His recommendation should be to accept:
A)project B because it has the shortest payback period. 
B)project A and reject project B based on their net present values. 
C)both projects as they both have positive net present values. 
D)project B and reject project A based on their average accounting returns. 
E)project B and reject project A based on both the payback period and the averageaccounting return.

Matt Is Analyzing Two Mutually Exclusive Projects of Similar Size