A Project Has an Initial Cost of $40,000 and a Four-Year

question 110

Multiple Choice

A project has an initial cost of $40,000 and a four-year life.The company uses straight-line depreciation to a book value of zero over the life of the project.The projected net income from the project is $1,200,$2,200,$3,500,and $2,700 a year for the next four years,respectively.What is the average accounting return?

• A)3.55%
• B)4.13%
• C)4.28%
• D)7.11%
• E)12.00%

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Definitions:

Libido

In psychoanalytic theory, a term used to describe sexual desire or the driving force behind all human behavior according to Freud.

Compromise Formation

In modern psychoanalytic thought, the main job of the ego, which is to find a compromise among the different structures of the mind and the many different things the individual wants all at the same time. What the individual actually thinks and does is the result of this compromise.

Ego

In psychoanalytic theory, the part of the human personality that is rational, reality-oriented, and operates according to the principle of seeking pleasure and avoiding pain.

Pleasure Principle

A psychoanalytic concept that posits individuals seek immediate gratification to avoid pain and increase pleasure, driving much of human behavior.