A company is evaluating three possible investments. Each uses the straight-line method of depreciation. Following information is provided by the company: Three Investments Investment Residual value Project A Project B Project C $220,000 $52,000 $220,000 0 24,000 20,000 Net cash inflows: Year 1 52,000 36,000 90,000 Year 2 52,000 27,000 60,000 Year 3 52,000 23,000 70,000 Year 4 52,000 20,000 30,000 Year 5 52,000 What is the accounting rate of return for Project B? (Round your answer to two decimal places.) 49.08% 51.32% O 45.15% O 30.13%

A company is evaluating three possible investments. Each uses the straight-line method of depreciation. Following information is provided by the company: Three Investments Investment Residual value Project A Project B Project C $220,000 $52,000 $220,000 0 24,000 20,000 Net cash inflows: Year 1 52,000 36,000 90,000 Year 2 52,000 27,000 60,000 Year 3 52,000 23,000 70,000 Year 4 52,000 20,000 30,000 Year 5 52,000 What is the accounting rate of return for Project B? (Round your answer to two decimal places.) 49.08% 51.32% O 45.15% O 30.13%

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....

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