The inability of a firm to accept two projects at a time due to the simultaneous and exclusive use of the same piece of machinery is considered a mutually exclusive project.
To understand this question, we must know the concept of capital budgeting.
Capital budgeting is the process through which a company evaluates possible large projects or investment opportunities. Capital budgeting strategies are used by business managers to assess which initiatives will generate the highest return over a certain time period.
Mutually Exclusive Projects is a concept that is commonly used in the capital budgeting process when firms pick a single project based on specific characteristics from a range of projects where approval of one project results in rejection of the other projects.
Therefore, the inability of a firm to accept two projects at a time due to the simultaneous and exclusive use of the same piece of machinery is considered a mutually exclusive project.
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