MC algo 9-6 Calculating AAR Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return? Multiple Choice 20.12% 21.95% 16.46% 10.97% 23.51%

MC algo 9-6 Calculating AAR Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return? Multiple Choice 20.12% 21.95% 16.46% 10.97% 23.51%

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter9: Capital Budgeting Techniques

Section: Chapter Questions

Problem 12PROB

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MC algo 9-6 Calculating AAR

Mountain Frost is considering a new project with an initial cost of $185,000. The equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. The projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. What is the average accounting return?

Multiple Choice

20.12%
21.95%
16.46%
10.97%
23.51%

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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