Adam is an analyst for American Investor Holdings LLC (AIH). He is evaluating ca

Question

Adam is an analyst for American Investor Holdings LLC (AIH). He is evaluating capital budgeting proposals for AIH's client, Sanger Machine Company. The first step is to classify the capital investment proposals. To assist Adam, read the description of the projects in the box below and indicate whether they should be classified as mutually exclusive, contingent, or independent projects. Sanger Machine Company will develop a parcel of downtown real estate. It could either construct and occupy a new office building or construct a building and lease it to one or more businesses. (Size limitations on the building will prevent the company from both occupying and leasing space in the building.) These projects should be classified as: Contingent projects Independent projects Mutually exclusive projects While taking a break, Adam confides to you that he sometimes gets confused about the differences between mutually exclusive, independent, and contingent projects. Help Adam understand these differences by reviewing the choices below and selecting the response that best explains the differences between a contingent and a mutually exclusive project. A contingent project is one whose acceptance precludes the acceptance of one or more other projects, whereas a mutually exclusive project is one whose acceptance is dependent on the adoption of one or more other projects. A mutually exclusive project is one made necessary by a need to reduce costs, whereas a contingent project is one made necessary by the need to meet legal, health, and safety standards. A contingent project is one whose acceptance (or rejection) has no effect on the acceptance or rejection of the other projects, whereas a mutually exclusive project is one made necessary by increased consumer demand. A contingent project is one whose acceptance is dependent on the adoption of one or more other projects, whereas a mutually exclusive project is one whose acceptance precludes the acceptance of one or more other projects.

Explanation / Answer

a. Mutually Exclusive

For Second one D is Correct Explanation

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.