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ID: 2532937 • Letter: H

Question

help

?A https://newconnect.mheducation.com/flow/connect.html Saved Help Save & Exit Submit Required information [The following information applies to the questions displayed below] Project A requires a $300, The company uses straight-line depreciation. Project A is expected to yield annual net income of $24.900 per year for the next five years. O initial investment for new machinery with a five-year life and a salvage value of $37000 Compute Project A's accounting rate of return. Accounting Rate of Return Choose Numerator: Choose Denominator:Accounting Rate of Return Annual aftertax net income Annual average investmentAccounting rate of retum 24,900/

Explanation / Answer

Accounting rate of return

Average net income / Average investment = Accounting rate of return 24,900 / 300,000 = 8.3%