Which Capital Budgeting Method Is Most Useful for Evaluating a Project

Multiple Choice

Which capital budgeting method is most useful for evaluating a project that has an initial after-tax cost of $5,000,000 and is expected to provide after-tax operating cash flows of $1,800,000 in year 1, ($2,900,000) in year 2, $2,700,000 in year 3, and $2,300,000 in year 4?

A) net present value
B) internal rate of return
C) payback
D) accounting rate of return