A Project Requires an Investment of $40,000 in Equipment

question 108

Multiple Choice

A project requires an investment of $40,000 in equipment. Annual cash flows of $8,000 are expected to occur for the next eight years. No salvage value is expected. The company uses the straight-line method of depreciation with no mid-year convention. Ignore income taxes. The accounting rate of return on the original investment for the project is

• A)6.25%.
• B)7.50%.
• C)16.00%.
• D)20.00%.

---

Definitions:

One-Way Transmission

A form of communication where information flows in a single direction from sender to receiver without feedback.

True Communication

Authentic and honest exchange of information between individuals.

Understood

Recognized or known either through direct explanation or through implication and context.

Multicultural

Pertains to or represents several different cultures or cultural elements.