1. Southern Chicken is considering two projects. Project A consists of creating an outdoor eating area on the unused portion of the restaurants property. Project B would use that outdoor space for creating a drive-thru service window. When trying to decide which project t to accept the firms should rely most heavily on which one of the following analytical methods?
Profitability index
Internal rate of return
Payback
Net present value
Accounting rate of return
2. A project has a net present value of zero. Which one of the following best describes this project?
The project has a zero percent rate of return.
The project requires no initial cash investment.
The project has no cash flows.
The summation of all of the projects cash flow is zero.
The projects cash inflows equal it’s cash outflows in current dollar terms.