A project produces annual net income of £9,500, £12,500, and £15,500 over the three years of its life, respectively.The initial cost of the project is £260,400.This cost is depreciated straight-line to a
Zero book value over three years.What is the average accounting rate of return if the required
Discount rate is 7%?
A)4.80%
B)7.32%
C)8.97%
D)9.60%
E)10.27%

Question

Quizplus · Accepted Answer

The Answer of A project produces annual net income of £9,500, £12,500, and £15,500 over the three years of its life, respectively.The initial cost of the project is £260,400.This cost is depreciated straight-line to a
Zero book value over three years.What is the average accounting rate of return if the required
Discount rate is 7%?
A)4.80%
B)7.32%
C)8.97%
D)9.60%
E)10.27%

A Project Produces Annual Net Income of £9,500, £12,500, and £15,500