Accounting Rate of Return (ARR): Wattle Storage Co

question 59

Multiple Choice

Accounting rate of return (ARR) : Wattle Storage Co. is expecting to generate after-tax income of $155,708, $159,312, and $161,112 for each of the next three years. The equipment used will have an average book value of $251,575 over that period. What is the ARR?

• A) 65.7%
• B) 69.4%
• C) 63.1%
• D) 66.8%

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Definitions:

Systematic Desensitization

A behavior therapy used to reduce phobic anxiety through the gradual exposure to the feared stimulus paired with relaxation exercises.

Anxiety-arousing Stimuli

External events or circumstances that provoke anxiety responses.

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A behavioral therapy technique used to reduce phobias or anxiety through gradual exposure to the feared object or situation while employing relaxation techniques.

Nausea-producing Drug

A medication that induces the sensation of wanting to vomit as a side effect.