Question: Question 14 2.5 pts ABC Corp. invests $500,000 this year in a three-year project. The investment will have the salvage value of $189.000. The performance

 Question 14 2.5 pts ABC Corp. invests $500,000 this year in

Question 14 2.5 pts ABC Corp. invests $500,000 this year in a three-year project. The investment will have the salvage value of $189.000. The performance of the project over the three-year span was as follows: At Year 1, the project had $260,000 in revenues, $30,000 in costs of goods sold, $32,000 in other operating expenses, and $20,000 in interest payments. The tax rate was 21%. At Year 2, the project had $290,000 in revenues, $40,000 in costs of goods sold, $30,000 in other operating expenses, and $20,000 in interest payments. The tax rate was 21%. At Year 3, the project had $270,000 in revenues, $41,000 in costs of goods sold, $33,000 in other operating expenses, and $20,000 in interest payments. The tax rate was 21%. What is this project's average accounting return during the three-year span? HINT: Be sure to set up your depreciation expenses based on the duration of the project. 17.25% 18.57% 18.13% 16.31%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!