Straight-line depreciation-what is average accounting return

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Reference no: EM13812312

A project has an initial cost of $54,000 and a four-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 $2,000, $3,900, $4,500, and $4,500 a year for the next four years, respectively. What is the average accounting return?

7.25 percent

27.59 percent

6.90 percent

52.59 percent

13.80 percent

Reference no: EM13812312

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