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D is corrent. Project C has the highest net present value of the available projects and would be ranked as the best.
A is incorrect.  Mutually exclusive investment projects must be ranked using the net present value technique. The best project is that which provides the greatest present value of cash flows less the present value of the investment outlays.  The project with the highest net present value contributes the most to the value of the firm and to the wealth of shareholders. Project A does not have the highest net present value of the available projects.


B is incorrect. While project B does have the highest relative profitability, as measured using the profitability index in question 14 above, it does not have the highest absolute profitability as measured using net present value. When ranking mutually exclusive projects, net present value must be used. An exception is if there is a capital rationing constraint, but no such constraint exists in this case since the company has sufficient financing available for any of the four projects.
C is incorrect. Project D does not have the highest net present value of the available projects. It would not be undertaken.