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.

What are the examples of independent projects?

An example of an independent project may be the decision to export to another country. If this opportunity has a positive NPV, it should be accepted. Mutually exclusive projects, on the other hand, are two or more projects, of which only one can be accepted.

What are independent projects?

Independent project. A project whose acceptance or rejection is independent of the acceptance or rejection of other projects.

Which projects should be accepted?

The NPV rule states that all projects with a positive net present value should be accepted while those that are negative should be rejected. If funds are limited and all positive NPV projects cannot be initiated, those with the high discounted value should be accepted.

What is difference between independent and mutually exclusive projects?

Projects are independent if the cash flows of one are not affected by theacceptance of the other. Conversely, two projects are mutually exclusive if acceptanceof one impacts adversely the cash flows of the other; that is, at most one of two or moresuch projects may be accepted.

What is complementary project?

Complementary project proposal means a proposal for a project which involves coordination with one or more other projects for which funding was awarded under this program in a previous fiscal year, or for which funding is requested under this program in the current fiscal year.

What is the difference between independent and mutually exclusive?

The difference between mutually exclusive and independent events is: a mutually exclusive event can simply be defined as a situation when two events cannot occur at same time whereas independent event occurs when one event remains unaffected by the occurrence of the other event.

When should a project be accepted?

When Net present value is greater than zero the project should be accepted.

Which project should be accepted and why?

What is complementary goods with example?

A Complementary good is a product or service that adds value to another. In other words, they are two goods that the consumer uses together. For example, cereal and milk, or a DVD and a DVD player. On occasion, the complementary good is absolutely necessary, as is the case with petrol and a car.

What is complementary funding?

A loan made by more than one lender that is secured by the same stock or other security. In complementary financing, two or more lenders make two or more loans to a single borrower and secure those loans by a certain security. …

Are mutually exclusive events dependent or independent?

1. Are Independent Events Always Mutually Exclusive and Are Mutually Exclusive Events Independent or Dependent? No, mutually exclusive events (the events with non-zero probability) are always dependent.