A Project Has an Initial Cost of $32,000 and a 3-Year

Multiple Choice

A project has an initial cost of $32,000 and a 3-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 $1,200,$2,300,and $1,800 a year for the next 3 years,respectively.What is the average accounting return?

A) 8.72 percent
B) 11.04 percent
C) 11.26 percent
D) 14.69 percent
E) 15.14 percent