Guerdon Ltd Is Reviewing a Project That Has an Initial

question 38

Multiple Choice

Guerdon Ltd is reviewing a project that has an initial outlay of $3m. The project will generate a cash inflow of $2m per annum. The project is expected to have a useful life of six years and a zero salvage value. This company uses straight-line depreciation. What is the average annual accounting rate of return on the initial total investment?

• A) 15%
• B) 20%
• C) 33%
• D) 50%

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Definitions:

Organizational Socialization

The process by which new employees learn the values, norms, and required behaviors of an organization.

Shared Assumptions

Common beliefs or ideas implicitly accepted by a group or organization that influence its culture and decision-making processes.

Enacted Values

Represent the values and norms that are actually exhibited or converted into employee behavior within an organization.

Corporate Value Statements

Declarations made by a company to express its core principles and ethical standards intended to guide its practices and decisions.