ABC Corporation Purchased an Asset Costing $450,000

Multiple Choice

ABC Corporation purchased an asset costing $450,000. The asset has an 8 year life, a $50,000 salvage value, and is depreciated on a straight line method. During the past four years, ABC posted net income of $98,000, $112,000, $134,000 and $122,000. Given the following information, calculate the company's average accounting return over the past four years.

A) 35.85%
B) 30.15%
C) 25.85%
D) 20.15%
E) 15.85%