Seattle, Inc, is contemplating a project that costs $180,000 . Expectations are that annual cash revenues will be $70,000 and annual expenses (including depreciation) will total $30,000 . The project has a six-year useful life and a residual value of $30,000 . Assume Seattle Inc uses straight line method of depreciation. The accounting rate of return for the project is
a. 53.3 percent.
b. 22.2 percent.
c. 66.7 percent.
d. 38.1 percent.
D
Business
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