Dysxa Co has limited the capital investment funds in its Delta Division to $7m. The division has
identified five possible investment projects, as follows:
Project Initial investment Net present value
A $3,000,000 $6,000,000
B $2,000,000 $3,200,000
C $1,000,000 $1,700,000
D $1,000,000 $2,100,000
E $2,000,000 $3,600,000
These projects are divisible and cannot be deferred or repeated. Projects C and E are mutually
exclusive.
When they say mutually exclusive then is it mean that either of them will be done with higher profitability index.?
Ask the Tutor ACCA FM
Net present value
4y ago#1Mutually exclusive means that if they do C then they cannot do E, or if they choose to do E then they cannot do C.
They cannot do both of those projects.
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