CFA mock exam A (am) level 2 problem 24: while the answer is easy (I used EAA), the question is misleading as it does not state that the two projects are mutually exclusive but merely ‘competing’ which is not the same thing. In fact, since ‘both projects’ is given as an answer option (B) that leads one to believe that the projects are not mutually exclusive. There is also no mention of capital rationing requirements so that one might select answer B (both projects). I guess one needs to remember that ‘competing’ - in CFA context - is equivalent to ‘mutually exclusive’.
On the real exam it will be clear whether they’re mutually exclusive or not.
You needn’t remember anything strange.