**Average Rate of Return**To calculate the average rate of return for a project, use the following scenario: The project is estimated to yield a total income of $149,280 over a period of three years. The initial cost of the project is $559,800, and it has a residual value of $62,200. Please round your answer to the nearest whole number.[Input box] %Note: Ensure that you are using the correct formula for calculating the average rate of return, which typically involves dividing the average annual profit by the initial investment, then multiplying the result by 100 to express it as a percentage.

It is also known by the name of the accounting rate of return. We can evaluate by dividing average…

Average Rate of Return Determine the average rate of return for a project that is estimated to yield total income of $149,280 over three years, has a cost of $559,800, and has a $62,200 residual value. Round to the nearest whole number. %

Average Rate of Return Determine the average rate of return for a project that is estimated to yield total income of $149,280 over three years, has a cost of $559,800, and has a $62,200 residual value. Round to the nearest whole number. %

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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Question

**Average Rate of Return**

To calculate the average rate of return for a project, use the following scenario: The project is estimated to yield a total income of $149,280 over a period of three years. The initial cost of the project is $559,800, and it has a residual value of $62,200. Please round your answer to the nearest whole number.

[Input box] %

Note: Ensure that you are using the correct formula for calculating the average rate of return, which typically involves dividing the average annual profit by the initial investment, then multiplying the result by 100 to express it as a percentage.

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