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)

Business

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