# What Is The Difference Between Independent Projects And Mutually Exclusive Projects?

Independent projects are ones whose cash flows are not reliant on the cash flows of any other projects in the pipeline. Projects that are mutually incompatible, on the other hand, are those that are interconnected. The implication is that adopting one project will only be feasible if the other alternative is also rejected.

When referring to independent projects, it means that their cash flows are not reliant on the cash flows of other related projects. However, initiatives that are mutually exclusive are ones that are intertwined in some way. The implication is that adopting one project will be only feasible if the other alternative is rejected as well.

## What is the formula for mutually exclusive events?

Similarly, if two occurrences A and B are mutually exclusive, the probability of each event may be represented as P (AUB)=P (A)+P (B), however if the same variables are independent, the probability can be expressed as P (AB) = P (A) + P (B) (B).

## What is the difference between an independent and mutually exclusive project?

What is the difference between projects that are independent of one another and projects that are mutually exclusive? If the cash flows of one project are unaffected by the acceptance of the other, the projects are considered independent. Projects that are mutually exclusive are those in which the cash flows of one project might be negatively affected by the acceptance of the other.

## What are independent projects?

This is an independent initiative. A project whose approval or rejection is not reliant on the acceptance or rejection of other initiatives is referred to as a stand-alone project.

## What is mutually exclusive projects?

Generally speaking, in the capital budgeting process, the term ″mutually exclusive projects″ refers to a situation in which companies choose a single project on the basis of certain parameters from a set of projects in which acceptance of one project will result in the rejection of the other projects being accepted by the same company.

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## What is the difference between mutually exclusive project and independent project How do the Accept Reject criteria differ if the above projects are mutually exclusive?

The acceptance rule for independent projects is that any projects with an internal rate of return (IRR) greater than the necessary return (hurdle rate) for those projects are accepted. If two projects are mutually incompatible, choose the one with the highest internal rate of return (assuming it is above the hurdle rate).

## What is the difference between mutually exclusive and not mutually exclusive?

Occurrences that are mutually exclusive can’t occur at the same time are referred to as mutually exclusive events. For example, right and left hand turns, even and odd numbers on a dice, winning and losing a game, and sprinting and walking are all examples of opposites. Non-mutually exclusive events are those that can occur at the same time as another event.

## Can something be both independent and mutually exclusive?

Yes, there is a link between occurrences that are mutually exclusive and events that are independent. Just to be sure everyone understands, mutually exclusive occurrences do not share any sample points with one another, and hence cannot occur at the same time.

## What are independent and mutually exclusive projects in capital budgeting?

When a project’s cash flow is not influenced by the accept/reject decision for other projects, it is referred to as an Independent Project. As a result, all Independent Projects that fulfill the Capital Budgeting requirement should be considered for approval. Mutually Exclusive Projects are a group of projects from which only one will be accepted out of the entire group.

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## What do mean by independent and mutually exclusive projects in capital budgeting in what type of decision can there be a conflict between NPV and IRR?

There is no contradiction between the NPV and IRR decision criteria when it comes to single and independent projects using conventional cash flow forecasts. However, for projects that are mutually incompatible, the outcomes of the two criteria may be in disagreement. This tension is caused by disparities in financial flow patterns and disparities in project magnitude.

## What is an independent research project?

The completion of independent research for academic credit requires the permission of a faculty adviser chosen by the student, the relevant division chair, and Graduate Academic Services prior to the start of the research project.

## How do you know if a project is mutually exclusive?

Capital projects that are mutually exclusive are those that are in direct competition with one another. For example, if a management is forced to choose precisely between undertaking project X or project Y, but not both of them at the same time, the projects X and Y are said to be mutually exclusive, because they cannot be undertaken simultaneously.

## Which project should be accepted if they are independent?

When a project is considered independent, it means that its cash flow is not influenced by the accept or reject decision for other projects. If the independent Project fits the capital budgeting requirements and has a net present value (NPV) that is greater than zero, it should be approved.

## Are mutually exclusive events independent or dependent?

1. 1.
2. Are independent events always mutually exclusive, and are mutually exclusive events always independent or dependent?
3. 2.
4. Are mutually exclusive events always independent or dependent?
5. No, mutually exclusive events (i.e., events with a non-zero probability) are always reliant on the other occurrences in the sequence.
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It is stated in the concept of independence for occurrences R and Q that P(R and Q) = P(R and Q) (Q).

## What is mutually exclusive examples?

Things that can’t happen at the same time are referred to as mutually exclusive occurrences. Run backwards and forwards at the same time, for example, is not possible. The events ″running ahead″ and ″running backwards″ are mutually exclusive, as is the event ″running backwards.″ Tossing a coin can also result in this sort of incident occurring.

## Which project or projects should be accepted if they are independent which project or projects should be accepted if they are mutually exclusive?

Independent projects: If the project’s net present value (NPV) is greater than zero, accept the project. Projects that are mutually exclusive: If the net present value (NPV) of one project is larger than the NPV of the other project, accept the project with the higher NPV as the winner. If the net present value of both projects is negative, both initiatives should be rejected.

## Which is better NPV or pi?

An NPV larger than one will generally correspond to a positive probability of success, whereas a negative probability of success will generally correspond to a PI less than one. The primary difference between net present value and profitability index is that the PI is given as a ratio, and therefore does not reveal the magnitude of the cash flow.