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A project has an initial cost of $72,000 and will produce positive net income for four years. The project will use straight-line depreciation over the life of the project. The average accounting return of this project can be computed as Multiple Choice a) (Sum of all net income/2)/($72,000/2) b) (Sum of all net income/4)/$72,000 c) ($72,000/4)/(Sum of all net income/4) d) ($72,000/2)/(Sum of all net income/2) e) (Sum of all net income/4)/($72,000/2)

A project has an initial cost of $72,000 and will produce positive net income for four years. The project will use straight-line depreciation over the life of the project. The average accounting return of this project can be computed as Multiple Choice a) (Sum of all net income/2)/($72,000/2) b) (Sum of all net income/4)/$72,000 c) ($72,000/4)/(Sum of all net income/4) d) ($72,000/2)/(Sum of all net income/2) e) (Sum of all net income/4)/($72,000/2)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A project has an initial cost of $72,000 and will produce positive net income for four years. The project will use straight-line depreciation over the life of the project. The average accounting return of this project can be computed as Multiple Choice a) (Sum of all net income/2)/($72,000/2) b) (Sum of all net income/4)/$72,000 c) ($72,000/4)/(Sum of all net income/4) d) ($72,000/2)/(Sum of all net income/2) e) (Sum of all net income/4)/($72,000/2)
Transcribed Image Text:A project has an initial cost of $72,000 and will produce positive net income for four years. The project will use straight-line depreciation over the life of the project. The average accounting return of this project can be computed as Multiple Choice a) (Sum of all net income/2)/($72,000/2) b) (Sum of all net income/4)/$72,000 c) ($72,000/4)/(Sum of all net income/4) d) ($72,000/2)/(Sum of all net income/2) e) (Sum of all net income/4)/($72,000/2)
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