A Company Is Evaluating Three Possible Investments What Is the Accounting Rate of Return for Project C

question 44

Multiple Choice

A company is evaluating three possible investments.Each uses the straight-line method of depreciation.The following information is provided by the company: $$\begin{array} { | l | r | r | r | } \hline & \text { Project A } & \text { Project B } & \text { Project C } \\\hline \text { Investment } & \$ 240,000 & \$ 54,000 & \$ 240,000 \\\hline \text { Residual value } & 0 & 10,000 & 36,000 \\\hline \text { Net cash flows: } & & & \\\hline \text { Year 1 } & 52,000 & 40,000 & 96,000 \\\hline \text { Year 2 } & 52,000 & 31,000 & 66,000 \\\hline \text { Year 3 } & 52,000 & 27,000 & 76,000 \\\hline \text { Year 4 } & 52,000 & 24,000 & 36,000 \\\hline \text { Year 5 } & 52,000 & 0 & 0 \\\hline\end{array}$$ What is the accounting rate of return for Project C? (Round your answer to two decimal places. )

• A)12.50%
• B)12.68%
• C)44.44%
• D)15.00%

Discern the physiological adaptations of vertebrates to excrete waste in different habitats.

Understand the role and mechanism of aldosterone in regulating blood pressure and kidney function.

Understand the principles of osmoregulation in freshwater and marine organisms.

Grasp the concept of counter-current multiplication in the loop of Henle and its significance in urine concentration.

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Definitions:

Perpetuities

Financial instruments that provide an endless stream of equal payments with no expiration date.

Equal Payments

Regular and identical payments made over a specified period, often found in loan agreements or installment plans.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return.

Ordinary Annuity

A series of equal payments made at regular intervals, such as monthly or annually, over a specified period.