Which one of the following is the best example of two mutually exclusive projects?

• A. A company can build either a new factory or expand its existing factory, but not both.
• B. A store offers discounts on both electronics and clothing during a sale.
• C. A business purchases raw materials from two different suppliers at the same time.
• D. A firm invests in both marketing and research and development simultaneously.

Answer: (A)

Verified step by step guidance

1. Understand the concept of mutually exclusive projects: These are projects where the acceptance of one project means the other cannot be undertaken. In other words, choosing one option excludes the possibility of choosing the other.
2. Analyze each option to see if selecting one project prevents the other from happening:
3. Option 1: Building a new factory or expanding the existing one, but not both. Here, choosing to build a new factory excludes expanding the existing one, and vice versa. This fits the definition of mutually exclusive projects.
4. Option 2: Offering discounts on both electronics and clothing simultaneously does not exclude either option; both can happen at the same time, so they are not mutually exclusive.
5. Option 3 and 4: Purchasing raw materials from two suppliers or investing in marketing and R&D simultaneously also allow both actions to occur together, so they are not mutually exclusive.