Summary:
- “Independent events” means that the occurrence or outcome of one event does not influence the occurrence of another event.
- “Mutually exclusive” events means that the occurrence or presence of one event entails the non-occurrence of the other.
- Independent events are expressed mathematically as pr (x and y) = pr (x) . ...
What is a mutually exclusive project?
A mutually exclusive project is one in which the acceptance of one precludes the acceptance of other projects. 2. How do the results of the NPV technique relate to the goal of maximizing shareholder wealth? The NPV technique measures the present value of the future cash flows that a project will produce.
What is the difference between mutually exclusive event and independent event?
Difference Between Mutually Exclusive and Independent Events The difference between mutually exclusive and independent events is: a mutually exclusive event can simply be defined as a situation when two events cannot occur at same time whereas independent event occurs when one event remains unaffected by the occurrence of the other event.
What is the mathematical formula for mutually exclusive events?
The mathematical formula for mutually exclusive events can be represented as P (X and Y) = 0. The mathematical formula for independent events can be defined as P (X and Y) = P (X) P (Y) The sets will not overlap in the case of mutually exclusive events.
Are head and tail events mutually exclusive in probability?
Hence, both the events here are mutually exclusive. But if we take two separate coins and flip them, then the occurrence of Head or Tail on both the coins are independent to each other. There are quite a few different events that occur in Probability such as Simple, Compound, Independent, Dependent and Mutually Exclusive.
What is the difference between mutually exclusive and independent events explain by example examples?
Two events are mutually exclusive when they cannot occur at the same time. For example, if we flip a coin it can only show a head OR a tail, not both. Independent event: The occurrence of one event does not affect the occurrence of the others.
What is the difference between independent and mutually exclusive projects between projects with normal and non normal cash flows?
What is the difference between independent and mutually exclusive projects? Independent projects: if the cash flows of one are unaffected by the acceptance of the other. Mutually exclusive projects: if the cash flows of one can be adversely impacted by the acceptance of the other.
What is the difference between mutually exclusive project and independent project How do the Accept Reject criteria differ if the above projects are mutually exclusive?
The acceptance rule for independent projects is to accept all projects where the IRR is above the required return (hurdle rate) for those projects. If projects are mutually exclusive, accept the one with the highest IRR (assuming it is above the hurdle rate).
What is the difference between mutually exclusive and dependent?
Thus, if event A and event B are mutually exclusive, they are actually inextricably DEPENDENT on each other because event A's existence reduces Event B's probability to zero and vice-versa. Mutually exclusive events are necessarily also dependent events because one's existence depends on the other's non-existence.
What is a mutually exclusive project?
Mutually Exclusive Projects is the term which is used generally in the capital budgeting process where the companies choose a single project on the basis of certain parameters out of the set of the projects where acceptance of one project will lead to rejection of the other projects.
What is an independent project?
A project that is not part of or dependent on any other project. Thus, the funding of an independent project does not depend on another project receiving funding first.
When choosing between mutually exclusive projects What is the best method to use?
The simplest way of choosing among mutually exclusive projects with equal lives is to compute the net present values of the projects and choose the one with the highest net present value. This decision rule is consistent with firm value maximization.
What is mutually exclusive examples?
Mutually exclusive events are events that can not happen at the same time. Examples include: right and left hand turns, even and odd numbers on a die, winning and losing a game, or running and walking. Non-mutually exclusive events are events that can happen at the same time.
How do you know if an event is mutually exclusive?
If two events have no elements in common (Their intersection is the empty set.), the events are called mutually exclusive. Thus, P(A∩B)=0 . This means that the probability of event A and event B happening is zero. They cannot both happen.
Can you be mutually exclusive and independent?
If two events are independent, they cannot be mutually exclusive.
What is mutually exclusive and independent in statistics?
Mutually exclusive events are those that cannot happen simultaneously, whereas independent events are those whose probabilities do not affect one another.
Are mutually exclusive events dependent or independent?
As a matter of fact, mutually exclusive events are dependent events. Consider tossing a coin, the results are mutually exclusive. Because we cannot get the heads and tails in a single toss. At the same time, the occurrence of one preventing another one from happening.
What are independent and mutually exclusive projects in capital budgeting?
An Independent Project is a project whose cash flows are not affected by the accept/reject decision for other projects. Thus, all Independent Projects which meet the Capital Budgeting criterion should be accepted. Mutually Exclusive Projects are a set of projects from which at most one will be accepted.
What are projects with cash flows that are not affected by the acceptance or non acceptance of other projects?
Answer and Explanation: Capital projects whose cash flows are not affected by the acceptance or rejection decisions made regarding other projects are called independent.
What are mutually exclusive investment projects and what is dependent project?
Unlike independent projects, in which a decision to invest in one project has no bearing on the decision to make investment in another, investment decision in case of mutually exclusive projects is dependent on the relative merit of the projects.
When choosing between mutually exclusive projects What is the best method to use?
The simplest way of choosing among mutually exclusive projects with equal lives is to compute the net present values of the projects and choose the one with the highest net present value. This decision rule is consistent with firm value maximization.
What is mutually exclusive?
Mutually exclusive events are those which cannot occur concurrently, i.e. where the occurrence of one event results in non-occurrence of the other event. Such events cannot be true at the same time. Therefore, the happening of one event makes the happening of another event impossible. These are also known as disjoint events.
When are two events mutually exclusive?
Two events are said to be mutually exclusive, when their occurrence is not simultaneous. Two events are said to be independent, when the occurrence of one event cannot control the occurrence of other. Occurrence of one event will result in the non-occurrence of the other.
What is the product of the two separate probabilities?
The product of their separate probabilities is equal to the probability that both events will occur. Let’s take an example, suppose if a coin is tossed twice, tail in the first chance and tail in the second, the events are independent.
What is independent event?
As the name suggests, independent events are the events, in which the probability of one event does not control the probability of the occurrence of the other event. The happening or non-happening of such an event has absolutely no effect on the happening or non-happening of another event.
What is it called when an event is unaffected by other events?
On the other hand, if each event is unaffected by other events, they are called independent events. Take a full read of the article presented below to have a better understanding of the difference between mutually exclusive and independent events.
When the occurrence of one event cannot control the occurrence of another, such events are called?
When the occurrence of one event cannot control the occurrence of other, such events are called independent event . In mutually exclusive events, the occurrence of one event will result in the non-occurrence of the other. Conversely, in independent events, occurrence of one event will have no influence on the occurrence of the other.
What is random experiment?
Random experiment in probability is a performance that generates a certain outcome, purely based on chance. The results of a random experiment are called event. In probability, there are various types of events, as in simple, compound, mutually exclusive, exhaustive, independent, dependent, equally likely, etc.