Southern Chicken Is Considering Two Projects

question 105

Multiple Choice

Southern Chicken is considering two projects. Project A consists of creating an outdoor eating area on the unused portion of the restaurant's property. Project B would use that outdoor space for creating a drive-thru service window. When trying to decide which project to accept, the firm should rely most heavily on which one of the following analytical methods? 

• A) Profitability index 
• B) Internal rate of return 
• C) Payback 
• D) Net present value 
• E) Accounting rate of return 

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Definitions:

Trading Blocs

Groups of countries that have formed international agreements to enhance trade among themselves through the reduction of tariffs and common regulations.

West European

Pertaining to the countries located in the western part of Europe, often characterized by shared historical, cultural, and political experiences.

North American

Of or relating to the continent that includes Canada, the United States, Mexico, and the countries of Central America.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, transforming agriculture-based societies into industrialized and urban ones.