Mutually exclusive investments

Mutually exclusive investments are a set of prospective capital investments, where the selection of one investment automatically excludes the other projects from being funded. For example, a company has $1,000,000 to invest, so the selection of Project A (which requires an investment of this amount) eliminates the possibility of making any other investments. The concept of mutually exclusive investments can also be driven by strategic considerations, where funds are directed toward those projects that will allow an organization to most effectively pursue a specific strategic direction.