A company is evaluating an investment.The company uses the straight-line method of depreciation.Use the following information to compute the accounting rate of return.Show your calculations and round to one decimal place.
$$\begin{array} { l r }
&\text { Project } \
\text { Investment } &\$875,000\
\text { Residual value }&0 \
\text { Operating income: } & \
\text { Year 1 } & 120,000 \
\text { Year 2 } & 120,000 \
\text { Year 3 } & 120,000 \
\text { Year 4 } & 120,000 \
\text { Year 5 } & 120,000 \

\end{array}$$

Question

A company is evaluating an investment.The company uses the straight-line method of depreciation.Use the following information to compute the accounting rate of return.Show your calculations and round to one decimal place.
 $$\begin{array} { l r } 
&\text { Project } \
\text { Investment } &\$875,000\
\text { Residual value }&0 \
\text { Operating income: } & \
\text { Year 1 } &  120,000 \
\text { Year 2 } & 120,000 \
\text { Year 3 } & 120,000 \
\text { Year 4 } & 120,000 \
\text { Year 5 } & 120,000 \

\end{array}$$

Quizplus · Accepted Answer

The Answer of A company is evaluating an investment.The company uses the straight-line method of depreciation.Use the following information to compute the accounting rate of return.Show your calculations and round to one decimal place.
 $$\begin{array} { l r } 
&\text { Project } \
\text { Investment } &\$875,000\
\text { Residual value }&0 \
\text { Operating income: } & \
\text { Year 1 } &  120,000 \
\text { Year 2 } & 120,000 \
\text { Year 3 } & 120,000 \
\text { Year 4 } & 120,000 \
\text { Year 5 } & 120,000 \

\end{array}$$

A Company Is Evaluating an Investment