Chapter 10, Problem 2MC

Summary Introduction

Case summary:

The cash flows of Franchise L's would start off slowly however will rise rather quickly as people become much health-conscious, while the cash flows of Franchise S would start off high however will trail off as other chicken competitors comes inside the marketplace and as people become more health-conscious and avoid fried foods. Franchise L serves breakfast and lunch, whereas Franchise S serves only dinner, so it is possible for person X to invest in both franchises.

Here are the net cash flows (in thousand $)

To determine: The difference between independent and mutually exclusive projects.