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Mutually exclusive project

This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.

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June 3, 2018 at 6:21 pm #455829
Vu
Member
- Topics: 46
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Dear John,
Could you please help me on this questions
Using the same company information for A Co (divisible projects) the additional factor to be considered is that projects C and E are mutually exclusive.
The information is reproduced below.
A company has $100,000 available for investment and has identified the following 5 investments in which to invest. All investments must be started now (Yr 0).
<img src=”https://i.imgur.com/cQzWNpW.png
” border=”0″ />
Determine the optimal project selection
Solution:
Project C mix 60%D => NPV = 41
Project E mix 50% D => NPV = 41.5
What I do not understand why the solution did not take into account of : Project F?
June 4, 2018 at 5:24 am #455882
John Moffat
Keymaster
- Topics: 57
- Replies: 54655
Mutually exclusive means that you can do only one of C or E, but you can’t do both.
As far as project F is concerned, I can’t help you without seeing the whole question, and you haven’t said which question you are referring to!
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