31 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$236,000Investment$52,000 $236,000Residual value26,00040,000Net cash inflows:Year 168,00068,00068,00068,00068,00028,00019,00015,00012,00080,00050,00060,00020,000Year 2Year 3Year 4Year 5What 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%

ARR = Average annual profit/ Average value of investment Average annual profit = Total net cash…

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 $52,000 $236,000 40,000 Investment $236,000 Residual value 26,000 Net cash inflows: Year 1 68,000 68,000 28,000 80,000 Year 2 19,000 50,000 Year 3 68,000 68,000 15,000 12,000 60,000 Year 4 Year 5 20,000 68,000 What is the accounting rate of return for Project B? (Round your answer to two decimal places.) ..... O A. 29.46% O B. 24.63% OC. 30.77% O D. 44.13%

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 $52,000 $236,000 40,000 Investment $236,000 Residual value 26,000 Net cash inflows: Year 1 68,000 68,000 28,000 80,000 Year 2 19,000 50,000 Year 3 68,000 68,000 15,000 12,000 60,000 Year 4 Year 5 20,000 68,000 What is the accounting rate of return for Project B? (Round your answer to two decimal places.) ..... O A. 29.46% O B. 24.63% OC. 30.77% O D. 44.13%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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