Buster Evans Is Considering Investing $20,000 in a Project with the Following

question 10

Multiple Choice

Buster Evans is considering investing $20,000 in a project with the following annual cash revenues and expenses: Depreciation will be $4,000 per year.
What is the accounting rate of return on the investment?

• A) 15%
• B) 35%
• C) 70%
• D) 75%
• E) None of these.

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Definitions:

Tuition

The fee for instruction at a school, university, or college.

Room And Board

The combined cost of housing (room) and food/meals (board) typically for students living on a college campus.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, a fundamental concept in economics.

Real Cost

The total cost of manufacturing or providing a service, including all direct and indirect costs.