A Project Has an Initial Cost of $32,000 and a 4-Year

question 60

Multiple Choice

A project has an initial cost of $32,000 and a 4-year life.The company uses straightline depreciation to a book value of zero over the life of the project.The projected net income from the project is $1,200,$2,200,$3,500,and $2,700 a year for Years 1 to 4,respectively.What is the average accounting return?

• A)3.55%
• B)14.13%
• C)4.28%
• D)7.11%
• E)15.00%