A Project Has Average Net Income of $4,160 a Year

Multiple Choice

A project has average net income of $4,160 a year over its 4-year life.The initial cost of the project is $65,000 which will be depreciated using straightline depreciation to a zero book value over the life of the project.The firm wants to earn a minimal average accounting return of 11.65 percent.Should the project be accepted or rejected? What is the AAR?

A) Accepted;10.24%.
B) Accepted;11.08%.
C) Accepted;12.80%.
D) Rejected;10.24%.
E) Rejected;12.80%.