A Project Has Average Net Income of £2,100 a Year

question 8

Multiple Choice

A project has average net income of £2,100 a year over its 4-year life.The initial cost of the project is £65,000 which will be depreciated using straight-line depreciation to a book value of zero over
The life of the project.The firm wants to earn a minimal average accounting return of 8.5%.The firm
Should _____ the project based on the AAR of _____.

• A)accept; 6.46%
• B)accept; 9.69%
• C)accept; 12.92%
• D)reject; 6.46%
• E)reject; 12.92%

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Definitions:

Racialization

The process of attributing complex characteristics (e.g., intelligence) to racial categories.

Stereotype

A stable and sweeping generalization about a category of people.

Implement

To put into action or execute a plan, tool, or strategy.

Trait Approach

A way of studying personality that focuses on the measurement of individual traits, which are consistent patterns of thought, feeling, and behavior.