Final answer:
The CFO's presentation of an automated vs. manual metal stamping press is an example of mutually exclusive projects in business, where the firm must choose one option and exclude the other. Option E is correct.
Step-by-step explanation:
The decision involving choosing between an automated press that requires little labor and a manual press that requires a significant amount of labor is an example of a decision involving mutually exclusive projects. This is because selecting one option (automated or manual) precludes the firm from pursuing the other option at the same time.
Firms must weigh the costs and benefits of each option, often employing a cost/benefit analysis to determine which project will yield the greatest return on investment. Factors such as the cost of labor, the cost of capital, the expected increase in labor productivity with automation, and the potential need to shift toward less capital and more labor due to changes in costs or union demands are all relevant considerations.
The firm should choose the option with the most favorable financial outcome, which may include the lowest total cost, or better alignment with the firm's financial strategy, whether that involves reinvestment of profits, borrowing, or equity financing.