If a firm accepts Project A it will not be feasible to also accept Project B because both projects would require the simultaneous and exclusive use of the same piece of machinery. These projects are considered to be:_________.

a. Mutually exclusive
b. Interdependent
c. Economically scaled
d. Operationally distinct
e. Independent.

Respuesta :

Answer: Option A

                                 

Explanation: In simple words, mutually exclusive projects refers to those projects which cannot be taken over by a firm together, that is, if there are two mutually exclusive projects available in the market than the firm can opt only one and has to let go the other.

These projects might have positive present values of future cash inflows but while computing together they decrease the overall value of the organisation. However there could be other reasons also behind not taking both projects such as lack of capital or technical infrastructure to handle both projects.

Thus, from the above we can conclude that the correct option is A.