What is the accounting rate of return for Project B? (Round your answer to two decimal places.)
A company is evaluating three possible investments. Each uses the straight-line method of depreciation. Following information is provided by the company:
A) 38.14%
B) 26.19%
C) 54.55%
D) 51.83%
C) 54.55%
*Average amount invested = (Amount invested + Residual value) / 2
ARR of Project B = Average annual operating income / Average amount invested
ARR = $18,000 / $33,000 = 54.55% (Rounded)
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