An investment has an initial cost of $410,000 and will generate the net income amounts shown below. This investment will be depreciated straight line to zero over the 4-year life of the project. Should this project be accepted based on the average accounting rate of return if the required rate is 16 percent? Why or why not? Year Net Income 1 $21,000 2 24,800 3 37,500 4 45,000 Group of answer choices Yes; because the AAR is greater than 16 percent No; because the AAR is less than 16 percent Yes; because the AAR is less than 16 percent Yes; because the AAR is equal to 16 percent No; because the AAR is greater than 16 percent
Question 10
An investment has an initial cost of $410,000 and will generate the net income amounts shown below. This investment will be
Year Net Income
1 $21,000
2 24,800
3 37,500
4 45,000
Group of answer choices
Yes; because the AAR is greater than 16 percent
No; because the AAR is less than 16 percent
Yes; because the AAR is less than 16 percent
Yes; because the AAR is equal to 16 percent
No; because the AAR is greater than 16 percent
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