When can we not simply compare the NPVs of two mutually exclusive proj

QUESTION

When can we not simply compare the NPVs of two mutually exclusive projects?

of the mutually exclusive projects. To compare the projects either the equivalent annuity approach or replacement chain method should be used. These approaches overcome the limitations of the net present value method when the projects are of different lives and the timing of cash flows s different.

 

ANSWER:

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