When unequal-lived projects are independent, the length of the projects' lives is not critical.

Question

Quizplus · Accepted Answer

When projects are independent, their cash flows are not affected by the existence of the other project. Therefore, the length of the projects' lives is not critical, whether they are of equal or unequal duration. The decision about whether to accept or reject a project should be based on the project's net present value or internal rate of return.

When Unequal-Lived Projects Are Independent, the Length of the Projects