The Nifty Fifty is considering opening a new store at a start-up cost of $628,000.The initial investment will be depreciated straight-line to zero over the 15-year life of the project.What is the average accounting rate of return given the following net income projections? $$\begin{array} { | c | r | }
\hline \text { Years } & \text { Net Income } \
\hline 1 - 6 & \$ 58,000 \
\hline 6 - 10 & 52,000 \
\hline 11 - 15 & 44,000 \
\hline
\end{array}$$
A)16.42 percent
B)16.68 percent
C)17.01 percent
D)17.18 percent
E)16.35 percent

Question

The Nifty Fifty is considering opening a new store at a start-up cost of $628,000.The initial investment will be depreciated straight-line to zero over the 15-year life of the project.What is the average accounting rate of return given the following net income projections? $$\begin{array} { | c | r | } 
\hline \text { Years } & \text { Net Income } \
\hline 1 - 6 & \$ 58,000 \
\hline 6 - 10 & 52,000 \
\hline 11 - 15 & 44,000 \
\hline
\end{array}$$
A)16.42 percent
B)16.68 percent
C)17.01 percent
D)17.18 percent
E)16.35 percent

Quizplus · Accepted Answer

The Answer of The Nifty Fifty is considering opening a new store at a start-up cost of $628,000.The initial investment will be depreciated straight-line to zero over the 15-year life of the project.What is the average accounting rate of return given the following net income projections? $$\begin{array} { | c | r | } 
\hline \text { Years } & \text { Net Income } \
\hline 1 - 6 & \$ 58,000 \
\hline 6 - 10 & 52,000 \
\hline 11 - 15 & 44,000 \
\hline
\end{array}$$
A)16.42 percent
B)16.68 percent
C)17.01 percent
D)17.18 percent
E)16.35 percent

The Nifty Fifty Is Considering Opening a New Store at a Start-Up