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A company is evaluating three possible investments. Each uses the straightline method of depreciation. Following information is provided by the company: Project A Project B
A company is evaluating three possible investments. Each uses the
straightline method of depreciation. Following information is provided by the company:
| Project A | Project B | Project C | |
| Investment | $234,000 | $54,000 | $234,000 |
| Residual value | 0 | 14,000 | 20,000 |
| Net cash flows: | |||
| Year 1 | 68,000 | 32,000 | 100,000 |
| Year 2 | 68,000 | 23,000 | 70,000 |
| Year 3 | 68,000 | 19,000 | 80,000 |
| Year 4 | 68,000 | 16,000 | 440,000 |
| Year 5 | 68,000 | 0 | 0 |
What is the accounting rate of return for Project B? (Round your answer to two decimal places.)
A.22.03%
B.35.52%
C.34.98%
D.36.76%
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