Eight bungalows P1, Q2, R3, S4, T5, U6, V7, and W8 are

Solution

V7 and P1 are sitting diagonally opposite and V7 is facing south. Thus, V7 is at the extreme right end facing south and P1 at extreme right end facing north. T5 is facing W8, but is not in the same row as that of P1. It means T5 is in the row where V7 is. W8 is between S4 and R3. But R3 is facing U6 so R3 is the immediate neighbour of P1 and S4 is at the extreme left end in that row.   Final arrangement is shown below: From above arrangement, it is clear that P1 is facing Q2. Hence, the correct answer is (B).