A Project Has an Initial Cost of £38,000 and a Four-Year

Multiple Choice

A project has an initial cost of £38,000 and a four-year life.The company uses straight-line depreciation to a book value of zero over the life of the project.The projected net income from the
Project is £1,000, £1,200, £1,500, and £1,700 a year for the next four years, respectively.What is the
Average accounting return?

A) 3.55%
B) 4.13%
C) 4.28%
D) 7.11%
E) 14.21%