A company is evaluating three possible investments. Each uses the straight - line method of depreciation. The

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A company is evaluating three possible investments. Each uses the straight - line method of depreciation. The following information is provided by the company:

Investment: $212,000

Salvage Value: $30,000

Net Cash Flows

Year 1: $86,000

Year 2: $56,000

Year 3: $66,000

Year 4: $26,000

Year 5: $0

What is the accounting rate of return?

A) 14.15%
B) 12.26%
C) 10.74%
D) 26.92%

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Managing Controlling and Improving Quality

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Authors: Douglas C. Montgomery, Cheryl L. Jennings, Michele E. Pfund

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Posted Date: Mar 20, 2019 09:48 AM

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A company is evaluating three possible investments. Each uses the straight - line method of depreciation. The

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Managing Controlling and Improving Quality

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