Isaac has analyzed two mutually exclusive projects of similar size and has compiled the following information based on his analysis

Isaac has analyzed two mutually exclusive projects of similar size and has compiled the following information based on his analysis. Both projects have 3- year lives.     Isaac has been asked for his best recommendation given this information. His recommendation should be to accept:    A.  both projects. B.  project B because it has the shortest payback period. C.  project B and reject project A based on their net present values. D.  project A and reject project B based on their average accounting returns. E.  neither project. Refer to section 9.5

49.

Which one of the following statements would generally be considered as accurate given independent projects with conventional cash flows?    A.  The internal rate of return decision may contradict the net present value decision. B.  Business practice dictates that independent projects should have three distinct accept indicators before a project is actually implemented. C.  The payback decision rule could override the net present value decision rule should cash availability be limited. D.  The profitability index rule cannot be applied in this situation. E.  The projects cannot be accepted unless the average accounting return decision ruling is positive. Refer to section 9.7

50.

In actual practice, managers frequently use the: I. average accounting return method because the information is so readily available. II. internal rate of return because the results are easy to communicate and understand. III. discounted payback because of its simplicity. IV. net present value because it is considered by many to be the best method of analysis.    A.  I and III only B.  II and III only C.  I, II, and IV only D.  II, III, and IV only E.  I, II, III, and IV Refer to section 9.7