What is the accounting rate of return for Project C? (Round your answer to two decimal places.)
A company is evaluating three possible investments. Each uses the straight-line method of depreciation. The following information is provided by the company:
A) 12.50%
B) 12.68%
C) 44.44%
D) 15.00%
B) 12.68%
*Average amount invested = (Amount invested + Residual value) / 2
ARR of Project C = Average annual operating income / Average amount invested
ARR = $17,500 / $138,000 = 12.68%
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