A Plant Asset of $180,000 Is Expected to Generate $80,000

Multiple Choice

A plant asset of $180,000 is expected to generate $80,000 in operating cash savings (excluding depreciation expense) annually for three years.Assume straight-line depreciation is used.The useful life is 3 years.The asset has no expected residual value.Ignore income taxes.The accounting rate of return based on the initial investment is ________.

A) 11.11%
B) 16.67%
C) 33.33%
D) 44.44%