What is the accounting rate of return for a project that is estimated to yield total...

Question

Question

What is the accounting rate of return for a project that is estimated to yield total income of $390,000 over three years and

business accounting

Answer 1

Answer #1

Accounting rate of return = average annual net income/initial investment

average annual net income = $390000/3 = $130000

therefore,

accounting rate of return = $130000/$863000

= 15.06%

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Answer 2

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