Q1) What is a mutually exclusive project? How should managers rank mutually exclusive projects?
Q2) Your company decides to buy the new equipment to replace the existing equipment. For evaluating the new equipment, would you please explain whether the following cash flows should be included in the analysis. WHY?
i) Reduction in operating costs annually for the use of the new equipment;
ii) research cost;
iii) Annual cash operating costs total for the use of existing equipment; and
iv) loan for financing the new equipment.