The Liberty Co. is considering two projects. Project A consists of building a wh

Question

The Liberty Co. is considering two projects. Project A consists of building a wholesale book outlet on lot #169 of the Englewood Retail Center. Project B consists of building a sit-down restaurant on lot #169 of the Englewood Retail Center. When trying to decide whether to build the book outlet or the restaurant, management should rely most heavily on the analysis results from the _______ method of analysis. Answer a. profitability index b. internal rate of return c. payback d. net present value e. accounting rate of return

Explanation / Answer

b. internal rate of return, as the resources here are limited, we just have only one lot, i.e the projects are mutually exclusive

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