Question: A decision is to be made between 2 mutually exclusive projects to electrify a village for 30 years, given that project A can operate for
A decision is to be made between 2 mutually exclusive projects to electrify a village for 30 years, given that project A can operate for 30 years and project B, which is not repeatable for engineering reasons, can operate for 15 years. If the respective net present values are used in evaluating the profitability of each project, then which of the following statements is true?
A. Unlike the IRR, since the NPV is used, the cash flows of the projects should not be altered from their original state
B. Since project B cannot be repeated, preference is to be given to project A
C. The cash flow of the projects needs to be adjusted to be the same length of life before comparing the NPVs
D. Project B cannot be considered a viable option since it cannot electrify the village for the target amount of years
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