An Asset of $180,000 Is Expected to Generate $90,000 in Operating

question 68

Multiple Choice

An asset of $180,000 is expected to generate $90,000 in operating income annually for three years.Assume straight-line depreciation is used.The asset has no expected residual value.Ignore income taxes.The accounting rate of return based on the initial investment is ________.

• A)8.33%
• B)16.67%
• C)33.33%
• D)41.67%

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