Use the Information Below to Answer the Following Question(s)

question 40

Multiple Choice

Use the information below to answer the following question(s) .
Dazzle Company uses straight-line depreciation and is considering a capital expenditure for which the following relevant cash flow data have been estimated:

-The accounting rate of return at Dazzle Company is closest to

• A) 38.33%.
• B) 32.00%.
• C) 6.33%.
• D) 5.51%.

---

Definitions:

Unearned Revenues

Income received by a company for goods or services that have yet to be provided, recorded as a liability on the balance sheet.

Prepaid Expenses

Costs that are paid in advance for goods or services, which are recognized as expenses over time as the benefits are received.

Employer Payroll Taxes

Employer payroll taxes are taxes that an employer is required to pay on behalf of their employees, including Social Security and Medicare taxes in the United States.

FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare, based on a percentage of payroll.