A Project Produces Annual Net Income of $10,500,$15,700,and $16,200 Over

Multiple Choice

A project produces annual net income of $10,500,$15,700,and $16,200 over its 3-year life and requires an initial investment in fixed assets of $210,000.The book value of these assets will be $140,007,$46,662,and $15,561 at the end of Years 1 to 3,respectively.What is the average accounting rate of return if the required discount rate is 14.5 percent?

A) 13.46%
B) 14.32%
C) 13.98%
D) 13.71%
E) 14.62%