Independent projects are those projects whose cash flows are not dependent on any other project. Whereas, mutually exclusive projects are those projects which are interrelated. It means that accepting one project will only be possible by rejecting the other alternative.
What does it mean when projects are mutually exclusive?
Put another way, when projects are mutually exclusive it means that they do the same job. Projects with normal cash flows have outflows, or costs, in the first year (or years) followed by a series of inflows.
What is the difference between mutually exclusive and independent events?
Events are mutually exclusive if the occurrence of one event excludes the occurrence of the other (s). Mutually exclusive events cannot happen at the same time. Events are independent if the occurrence of one event does not influence (and is not influenced by) the occurrence of the other (s).
What is an independent project in project management?
Similarly, what is an independent project? Definition of Independent Project. A project whose acceptance or rejection is independent of the acceptance or rejection of other projects.
What is the difference between co-exist and mutually exclusive?
Conversely, co-exist means to happen together at a time or to occur concurrently. The opposite of mutually exclusive is mutually inclusive. That means, two events should happen at the same time and that they cannot be independent of one another.
What does it mean that projects are independent or mutually exclusive?
Mutually exclusive events are events that can't both happen, but should not be considered independent events. Independent events have no impact on the viability of other options. For a basic example, consider the rolling of dice. You cannot roll both a five and a three simultaneously on a single die.
What is mutually independent projects?
Mutually Exclusive Projects is the term which is used generally in the capital budgeting process where the companies choose a single project on the basis of certain parameters out of the set of the projects where acceptance of one project will lead to rejection of the other projects.
What is an independent project?
Independent project. A project whose acceptance or rejection is independent of the acceptance or rejection of other projects.
What is mutually inclusive project?
Mutually Inclusive Partnerships brings together a number of social enterprises, programmes and initiatives specifically designed to respond to the challenges of creating more and better employment opportunities for people with learning disabilities.
What is mutually exclusive examples?
Mutually exclusive events are events that can not happen at the same time. Examples include: right and left hand turns, even and odd numbers on a die, winning and losing a game, or running and walking. Non-mutually exclusive events are events that can happen at the same time.
What is meaning of mutually exclusive?
Britannica Dictionary definition of MUTUALLY EXCLUSIVE. : related in such a way that each thing makes the other thing impossible : not able to be true at the same time or to exist together. War and peace are mutually exclusive. [=war and peace cannot exist at the same time] mutually exclusive events.
How do you choose between mutually exclusive projects?
Mutually exclusive projects: If the NPV of one project is greater than the NPV of the other project, accept the project with the higher NPV. If both projects have a negative NPV, reject both projects.
What is the difference between NPV and IRR?
What Are NPV and IRR? Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. By contrast, the internal rate of return (IRR) is a calculation used to estimate the profitability of potential investments.
How do you structure an independent project?
Build your projectLearn about past work on your topic and build a foundation for your project.Develop a central idea.Meet with your faculty mentors to seek feedback on your ideas and guidance for next steps. ... Create a project plan and evaluate your ideas.More items...
What's the difference between mutually exclusive and mutually inclusive?
Thus, events A and B are mutually exclusive because they both cannot occur at the same time. The number that a dice lands on can't be even and odd at the same time. Conversely, two events are mutually inclusive if they can occur at the same time.
What are mutually exclusive and mutually inclusive projects?
2 events are mutually exclusive when they cannot both occur simultaneously. 2 events are mutually inclusive when they can both occur simultaneously.
What is the differences between inclusive and exclusive?
Inclusive often means to be taken in, to include. Exclusive is many times means pushing something out of some sort of group, thus creating an element of specialness because of restricted entrance. Being inclusive is typically the opposite of being exclusive.
What is the difference between mutually exclusive and independent events?
The difference between mutually exclusive and independent events is: a mutually exclusive event can simply be defined as a situation when two events cannot occur at same time whereas independent event occurs when one event remains unaffected by the occurrence of the other event.
What is an independent event?
An independent event is termed as an event that occurs without being affected by other events. This is termed as an independent event. The happening of one event has nothing to do with the happening of the other and there is no cause-effect between the two. Suppose an event does not take place that does not stop other events from happening.
When does the occurence of one event not control the happening of the other event?
When the occurence of one event does not control the happening of the other event then it is termed as an independent event. The non-occurrence of an event will end up in the occurrence of an event. There is no influence of an occurrence with another and they are independent of each other. The sets will not overlap in the case ...
What is an independent project?
Independent projects are those projects which are not related to each other. Their cash flows do not depend on any other project. When choosing between two independent projects, their net present values should be considered.
When a company needs to choose between two projects which are mutually exclusive, should the company choose the one with
Therefore when a company needs to choose between two projects which are mutually exclusive, the company should choose the one with a positive NPV, and if both the projects have positive NPV, the one with the higher NPV should be chosen. However if both the projects have negative NPV, both of them should be rejected.
