The Nifty Fifty Is Considering Opening a New Store at a Start-Up

question 72

Multiple Choice

The Nifty Fifty is considering opening a new store at a start-up cost of $628,000.The initial investment will be depreciated straight-line to zero over the 15-year life of the project.What is the average accounting rate of return given the following net income projections? $$\begin{array} { | c | r | } \hline \text { Years } & \text { Net Income } \\\hline 1 - 6 & \$ 58,000 \\\hline 6 - 10 & 52,000 \\\hline 11 - 15 & 44,000 \\\hline\end{array}$$

• A)16.42 percent
• B)16.68 percent
• C)17.01 percent
• D)17.18 percent
• E)16.35 percent

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Definitions:

Internal

pertains to occurring or existing within the limits or boundaries of something; often referring to processes or features within an organization or an individual.

Unstable

Lacking consistency or predictability in state, structure, or behavior, leading to unpredictability.

Macrosystem

The broadest context in the ecological systems theory, encompassing societal cultures, laws, customs, and resources that influence the individual's development.

Exosystems

In ecological systems theory, the external environments and contexts that indirectly influence an individual's development, such as parents' workplaces.