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%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2e8a421-b589-43b1-9665-9866aff02346%2Fc839e924-f9af-48ec-9bab-b560ca9cfc09%2F9kkpjov_processed.png&w=3840&q=75)
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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