Shawn's Health Care Is Considering a Project Which Will Produce

Multiple Choice

Shawn's Health Care is considering a project which will produce sales of $1.7 million a year for the next ten years. The profit margin is estimated at 8 %. The project will cost $2.9 million and will be depreciated straight-line to a zero book value over the life of the project. Shawn's has a required accounting return of 9 %. This project should be _____ because the AAR is _____.

A) Accepted; 8.44 %
B) Accepted; 9.38 %
C) Accepted; 9.82 %
D) Rejected; 8.44 %
E) Rejected; 9.38 %