What is the average accounting rate of return

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A project produces annual net income of $11,500, $13,700, and $16,900 over the three years of its life, respectively. The initial cost of the project is $257,000. 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 6.75 percent?

A) 5.33 percent

B) 5.46 percent

C) 6.58 percent

D) 10.92 percent

E) 13.90 percent

Reference no: EM13807950

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