7. A project has an initial capital investment of $984,000 and a four-year life, after which it will be fully depreciated to zero. The projected net income from the project will be $32,000, $38,000, $43,000, and $49,000, respectively, in each of the next four years. What is the average accounting return (AAR) of this project?

• A. 4.12%
• B. 8.23%
• C. 11.69%
• D. 16.46%

10. Given the following average returns, what is the risk premium for the Commodities asset class? Large Cap Stocks, 12.3%; Small Cap Stocks, 16.0%; Long-term Corporate Bonds, 9.6%; Collectibles, 13.9%: Commodities, 14.4%; Real Estate, 10.7%; Treasury Bills, 3.2%; Inflation, 2.4%.

• A. 8.2%
• B. 9.0%
• C. 11.2%
• D. 12.0%