Information for two alternative projects involving machinery investments follows: Project 1 Project 2 Initial investment $ (120,000) $ (90,000) Salvage value 0 10,000 Annual income 15,000 12,000 Compute accounting rate of return for each project.

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Project 1 Project 2 Initial investment $ (120,000) $ (90,000) Salvage value 0 10,000 Annual income 15,000 12,000 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: = Accounting rate of return 0 < Required A Required B > 0 Project 1 Project 2 Initial investment $ (120,000) $ (90,000) Salvage value 0 10,000 Annual income 15,000 12,000 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Project 1 Project 2 Numerator: Accounting Rate of Return Denominator: = Accounting rate of return 0 < Required A Required B > 0