What is the difference between independent and mutually exclusive projects between projects with?

What is the difference between independent and mutually exclusive projects between projects with?

What is the difference between independent and mutually exclusive projects? Independent projects: if the cash flows of one are unaffected by the acceptance of the other. Mutually exclusive projects: if the cash flows of one can be adversely impacted by the acceptance of the other.

What is mutually exclusive project?

Mutually exclusive projects are capital projects which compete directly with each other. For example, if a manager has to make a choice strictly between undertaking either project X or Y, but not both of them concurrently, then projects X and Y are said to be mutually exclusive.

Which project or projects should be accepted if they are independent?

The decision rule for independent projects is to accept all projects with a positive NPV. For mutually exclusive projects, accept the project with the highest positive NPV.

When using NPV there can be independent projects or mutually exclusive projects What is the difference between these projects?

Capital Projects Using Net Present Value Independent projects are those not affected by the cash flows of other projects. Mutually exclusive projects, however, are different. If two projects are mutually exclusive, it means there are two ways of accomplishing the same result.

Why can two events that are mutually exclusive never be independent?

If two events are mutually exclusive then they do not occur simultaneously, hence they are not independent.

What are mutually exclusive investment projects What is a dependent project?

Unlike independent projects, in which a decision to invest in one project has no bearing on the decision to make investment in another, investment decision in case of mutually exclusive projects is dependent on the relative merit of the projects.

Which is better higher IRR or NPV?

In order for the IRR to be considered a valid way to evaluate a project, it must be compared to a discount rate. If a discount rate is not known, or cannot be applied to a specific project for whatever reason, the IRR is of limited value. In cases like this, the NPV method is superior.