Question

Uptown Developers is considering two projects. Project A consists of building a wholesale book outlet on the firm's downtown lot. Project B consists of building a sit-down restaurant on that same lot. The lot can only accommodate one of the projects. When trying to decide whether to build the book outlet or the restaurant, management should rely most heavily on the analysis results from which one of these methods?A. Profitability index

B. Internal rate of return
C. Payback
D. Net present value
E. Accounting rate of return

Answer 1

D. Net present value

Step-by-step explanation:

Net present value -

It refers to the value of the flow of cash inside minus the flow of cash outside , for a specified period of time , is referred to as net present value .

The value of NPV is important for investment planning in order to determine the investment for a particular project .

Hence , from the given scenario of the question.

The method used is Net present value.