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

question 263

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 percent.
The firm should _____ the project based on the AAR of _____

• A) Accept; 6.46 percent.
• B) Accept; 9.69 percent.
• C) Accept; 12.92 percent.
• D) Reject; 6.46 percent.
• E) Reject; 12.92 percent.

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Definitions:

Myoglobin

A protein in muscle cells that binds oxygen, providing a reserve supply of oxygen within muscles.

Muscular Disorder

A variety of diseases that affect the muscular system, impairing muscle strength, flexibility, and function.

Tendon

A flexible but inelastic cord of strong fibrous collagen tissue attaching a muscle to a bone.

Sports-related Activity

Any physical activity or exercise that is competitive, organized, and follows specific rules, often involving teamwork or individual challenge.