Southern Chicken Is Considering Two Projects

question 6

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:

Telephone Order Merchandise Rule

A regulation designed to protect consumers in transactions made over the telephone, ensuring clear disclosure of terms and conditions.

Cooling-Off Period

A legally mandated time frame allowing parties to back out of financial agreements without penalty.

Truth-In-Lending Act

A U.S. federal law designed to protect consumers in their dealings with lenders and creditors, ensuring clear disclosure of loan terms and costs.

Cease-And-Desist Order

An administrative or judicial order prohibiting a person or business firm from conducting activities that an agency or court has deemed illegal.