The Depot Is Considering a Project with Annual Sales of $325,000

Multiple Choice

The Depot is considering a project with annual sales of $325,000 for four years.The profit margin is 4.65 percent.The initial cost for equipment will be $330,000.The equipment will be depreciated by $55,000 each year.The required average accounting rate of return is 11.4 percent.Should this project be accepted or rejected? What is the AAR?

A) Rejected;6.52%
B) Rejected;6.87%
C) Rejected;7.85%
D) Accepted;6.87%
E) Accepted;7.85%