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What is the accounting rate of return for a project that is estimated to yield total...

What is the accounting rate of return for a project that is estimated to yield total income of $369,000 over three years and costs $850,000? (Round your answer to 2 decimal places

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Answer #1

Accounting rate of return = 43.41%

Please also use alternate answer given below if the above answer do not work

Working

Accounting rate of return= Net income/Investment
Accounting rate of return (369000/850000) 43.41%

Alternate answer---------

Sometimes In place of investment we use average investment, the answer will be different then

Accounting rate of return = 86.82%

Working

Accounting rate of return= Net income/Average investment
Accounting rate of return (369000/425000) 86.82%

Average investment = 850000/2

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