Mutually Exclusive Investment Decision

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Mutually Exclusive Investment Decision

The decision to make an investment that prevents making a different investment. Some investment decisions are mutually exclusive by nature; for example taking a long position in a stock precludes taking a short position the same stock at the same time. Others are mutually exclusive circumstantially; for example, if one only has so much money to invest and buys stocks A, B, and C, there may not be enough left over to buy stock D. See also: Opportunity cost.
References in periodicals archive ?
The BCR is an input to project prioritization, the NPV is applied to mutually exclusive project selection, and the FYRR is used to estimate optimal project timing.
The NPV is recommended by Austroads (2005) and the Australian Transport Council (ATC 2006c) to be the most appropriate measure for selecting from mutually exclusive project options.
NPV is typically better when comparing mutually exclusive project alternatives.
When comparing among mutually exclusive projects, the highest NPV wins
Engelhardt does not distinguish between independent projects and mutually exclusive projects.
The wooden bridge and the steel bridge are mutually exclusive projects.
Payback cannot evaluate mutually exclusive projects because it doesn't consider the whole project period--would it be better to accept a project with a longer payback period that provides higher returns after that point than to accept a project with a shorter payback period but lower returns?
Whereas Cineaste may rationalize the controversy surrounding Lee's film by noting, "Malcolm X is not the sort of person Hollywood biopics normally celebrate" (Crowdus 4), Baldwin was not content to separate inclusion and transformation into mutually exclusive projects.
Deconstruction and reconstruction are not, as Matthews and Young (and Smart) seem to think, mutually exclusive projects.
The course also discusses the project interaction situations such as capital rationing, mutually exclusive projects, among others.
I am also accused of not distinguishing between independent projects and mutually exclusive projects.
IRR has also been criticised because it doesn't always correctly evaluate mutually exclusive projects or ensure the best allocation of resources when capital rationing occurs.