GlenGary Investment Corporation Is Analyzing a Proposal to Build Condo

question 105

Multiple Choice

GlenGary Investment Corporation is analyzing a proposal to build condo units in southern Florida. The project will require an initial invest of $500,000. The building has a useful life of 20 years, a residual value of $200,000, and is depreciated on a straight-line basis. GlenGary uses the accounting rate of return model to evaluate investment projects. What is the minimum annual operating income that must be generated by this project to achieve the 9% accounting return required by GlenGary?

• A)$18,000
• B)$45,000
• C)$25,000
• D)$27,000

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Definitions:

MEO

Medium Earth Orbit, a region of space around the Earth positioned at an altitude higher than low Earth orbit (LEO) and lower than geostationary orbit (GEO).

Launch Cost

The total expenses associated with the introduction of a new product or service to the market, including research, marketing, and any initial operational costs.

GEO

refers to Geographical Information Systems (GIS), which are systems that capture, store, manipulate, analyze, manage, and present spatial or geographic data.

LEO

Low Earth Orbit, denoting satellites that orbit the Earth at altitudes between 160 to 2,000 kilometers.