A project has an initial cost of $16,780 and a 3-year life.The company uses straight-line depreciation to a book value of zero over the life of the project.The projected net income from the project is $3,320,$3,080,and $1,700 for Years 1 to 3,respectively.What is the average accounting return?
A)28.56%
B)34.13%
C)14.28%
D)27.11%
E)32.18%

Question

Quizplus · Accepted Answer

AAR = [($3,320 + $3,080 + $1,700)/ 3] / ($16,780 / 2)= 0.3218,or 32.18%

A Project Has an Initial Cost of $16,780 and a 3-Year