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Standard XII

Accountancy

Operating Cycle

Two mutually ...

Question

Two mutually exclusive projects with different economic lives can be compared on the basis of ______________.

Internal Rate of Return

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Profitability Index

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Net Present Value

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Equivalent Annuity Value

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Solution

The correct option is D Equivalent Annuity Value
The Equivalent Annual Cost (EAC) is the annual cost of owning, operating and maintaining an asset over its entire life. EAC is often used by firms for capital budgeting decision.The equivalent annual cost methodology allows a company to compare the cost effectiveness of various assets that have unequal lifespan.

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Similar questions

Q. Assertion :If the independent events

A

B

are such that

0 < P (A) < 1, 0 < P (B) < 1

, then

A

B

can not be mutually exclusive. Reason: Two events

A

B

can not be mutually exclusive, if

P (A \cap B) \neq 0

A, B

are two events of a simple space.

Assertion (A):-

A, B

are mutually exclusive

\Rightarrow P (A) \leq P (¯ B)

Reason (R):-

A, B

are mutually exclusive

\Rightarrow P (A) + P (B) \leq 1

Q. If A and B are two mutually exclusive and exhaustive events with

P (B) = 3 P (A),

then what is the value of

P (¯ ¯¯ ¯ B)

A $5 -$ year ordinary annuity has a present value of $$ 1, 000$ . If the interest rate is $8$ percent, the amount of each annuity payment is closest to which of the following?

250.44$
231.91$
181.62$
170.44$
184.08$

Q. Two dice are thrown. The events

A, B

and

C

are as follows:
A : getting an even number on the first die
B : getting an odd number on the first die
C : getting the sum of the numbers on the dice

\leq 5

State true or false : (give reason for your answer)
(i)

A

and

B

are mutually exclusive
(ii)

A

and

B

are mutually exclusive and exhaustive
(iii)

A = B^{'}

(iv)

A

and

C

are mutually exclusive
(v)

A

and

B^{'}

are mutually exclusive
(vi)

A^{'}, B^{'}, C

are mutually exclusive and exhaustive

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