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Capital budgeting is
• Analysis of potential additions to fixed assets
• Long term decisions; involving large expenditures
• Very important to a firm’s future
• Define the firm’s strategic directions
b. What is the difference between independent and mutually exclusive projects?
An independent project is one in which accepting or rejecting one project does not affect the acceptance or rejection of other projects under consideration. No relationship exists between the cash flows of one project and another. A mutually exclusive projects is one in which the acceptance of one exclude the acceptance of other projects
c...
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