Weston's Uses Straight-Line Depreciation to Zero Over a Project's Life

question 10

Multiple Choice

Weston's uses straight-line depreciation to zero over a project's life. A new project has a fixed asset cost of $2,687,300 and projected annual net income of $95,000, $162,000, $286,000, and $304,000 over Years 1 to 4. What is the average accounting return?

• A) 14.35 percent
• B) 15.63 percent
• C) 14.87 percent
• D) 15.76 percent
• E) 16.05 percent

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