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Assertion: a project with a positive present worth should always be undertaken. Reason: a positive present worth means it earns more than the minimum attractive rate.

  • A.the assertion is true but the reason given for it is false
  • B.the assertion is false although the reason offered is a true statement in itself
  • C.both the assertion and the reason are true and the reason explains the assertion
  • D.both the assertion and the reason are true but the reason does not explain the assertion

Answer: B

The reason is correct, but under a budget constraint or among mutually exclusive alternatives a project may be acceptable in isolation and still not be the one to choose. Acceptability and selection are separate questions.

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