An Investment Has an Initial Cost of $462,000 and Will

question 101

Multiple Choice

An investment has an initial cost of $462,000 and will generate the net income amounts shown below.This investment will be depreciated straight-line to zero over the four-year life of the project.Should this project be accepted based on the average accounting rate of return if the required rate is 14.75 percent? Why or why not? $$\begin{array} { | c | r | } \hline \text { Year } & \text { Net Income } \\\hline 1 & \$ 27,000 \\\hline 2 & 24,800 \\\hline 3 & 37,500 \\\hline 4 & 45,000 \\\hline\end{array}$$

• A)Yes, because the AAR is equal to 14.75 percent
• B)Yes, because the AAR is greater than 14.75 percent
• C)Yes, because the AAR is less than 14.75 percent
• D)No, because the AAR is greater than 14.75 percent
• E)No, because the AAR is less than 14.75 percent

---

Definitions:

Multidisciplinary Teams

Groups composed of professionals from different specialties working together towards a common goal, often used in healthcare, research, or project management contexts.

Community Involvement

Participation by individuals or groups in activities and discussions aimed at improving the welfare and objectives of their community.

Competencies of Collaboration

The essential skills, knowledge, and attitudes required to work effectively within teams and partnerships towards common goals, emphasizing communication, mutual respect, and shared decision-making.

Various Viewpoints

The acknowledgment and consideration of differing perspectives, opinions, or approaches, recognizing the multiplicity of experiences and interpretations.