A Project Has an Initial Cost of $32,000 and a 3-Year

question 54

Multiple Choice

A project has an initial cost of $32,000 and a 3-year life.The company uses straight-line depreciation to a book value of zero over the life of the project.The projected net income from the project is $1,200,$2,300,and $1,800 a year for the next 3 years,respectively.What is the average accounting return?

• A)8.72 percent
• B)11.04 percent
• C)11.26 percent
• D)14.69 percent
• E)15.14 percent

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Definitions:

Simon Fraser University

A public research university located in British Columbia, Canada, known for its comprehensive academic and research programs.

Method of Acceptance

The ways in which an offeree can accept an offer in contract law, such as by performance, promise, or as otherwise stipulated in the offer.

Smoked Salmon

Smoked Salmon is a preparation of salmon, typically cured and then smoked, either hot or cold, used as a delicacy in various cuisines.

Letter of Acceptance

A formal document issued to acknowledge agreement to the terms of a contract, often marking the commencement of the contractual obligations.