FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A company is evaluating three possible investments. Each uses the straight – line method of depreciation. Following information is provided by the company:
Project A Project B Project C
$236,000
Investment
$52,000 $236,000
Residual value
26,000
40,000
Net cash inflows:
Year 1
68,000
68,000
68,000
68,000
68,000
28,000
19,000
15,000
12,000
80,000
50,000
60,000
20,000
Year 2
Year 3
Year 4
Year 5
What is the accounting rate of return for Project B? (Round your answer to two decimal places.)
....
O A. 29.46%
B. 24.63%
C. 30.77%
D. 44.13%
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Transcribed Image Text:A company is evaluating three possible investments. Each uses the straight – line method of depreciation. Following information is provided by the company: Project A Project B Project C $236,000 Investment $52,000 $236,000 Residual value 26,000 40,000 Net cash inflows: Year 1 68,000 68,000 68,000 68,000 68,000 28,000 19,000 15,000 12,000 80,000 50,000 60,000 20,000 Year 2 Year 3 Year 4 Year 5 What is the accounting rate of return for Project B? (Round your answer to two decimal places.) .... O A. 29.46% B. 24.63% C. 30.77% D. 44.13%
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