help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Which of the following best describes the appropriate way to evaluate mutually exclusive projects with unequal lives? a) NPV is the appropriate method because NPV has been always the method of choice

Which of the following best describes the appropriate way to evaluate mutually exclusive projects with unequal lives? a) NPV is the appropriate method because NPV has been always the method of choice

Finance

Which of the following best describes the appropriate way to evaluate mutually exclusive projects with unequal lives?

a) NPV is the appropriate method because NPV has been always the method of choice.

b) IRR is the appropriate method because IRR adjusts for the fact that the projects are not of the same length.

c) Replacement chain is the appropriate method because it equalizes the length of the unequal projects.

d) Equivalent annual annuity is the appropriate method because it adjusts for the fact that the projects are not of the same length.

e) Both c. and d. are correct.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

If the projects are mutually exclusive with unequal lives the replacement chain is the appropriate method because it equalizes the length of the unequal projects and equivalent annual annuity is the appropriate method because it adjusts for the fact that the projects are not of the same length. The project that have highest equivalent annual annuity should be accepted.

Hence, the option e) Both c. and d. are correct

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)