What is average accounting return

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Reference no: EM131546280

A project has an initial cost of $40,000 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 $1,300, $1,500, $1,700, and $4,500 a year for the next four years, respectively. What is the average accounting return?

56.25 percent

5.63 percent

11.25 percent

8.89 percent

22.50 percent

Reference no: EM131546280

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