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

question 29

Multiple Choice

A company is evaluating three possible investments.Each uses straight-line method of depreciation.Following information is provided by the company.
$\begin{array}{|l|l|l|l|} \hline & \text { Project A } & \text { Project B } & \text { Project C } \\\hline \text { Investment } & \$ 216,000 & \$ 50,000 & \$ 216,000 \\\hline \text { Salvage value } &0 & 18,000 &28,000 \\\hline \text { Net cash flows: } & & & \\\hline \text { Year } 1 & 58,000 & 24,000 & 100,000 \\\hline \text { Year } 2 & 58,000 & 15,000 & 70,000 \\\hline \text { Year } 3 & 58,000 & 11,000 &80,000 \\\hline \text { Year } 4 & 58,000 & 8,000 & 40,000 \\\hline \text { Year } 5 & 58,000 & 0& 0 \\\hline\end{array}$
What is the accounting rate of return for Project B?

• A) 15.96%
• B) 19.12%
• C) 18.19%
• D) 33.87%

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A personality disorder characterized by a lack of interest in social relationships, emotional coldness, and detachment.

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A therapeutic method designed to increase happiness and solve problems by reshaping unhealthy behaviors, emotions, and thoughts.