1. A project has an initial cost of $38,000 and a four-year life. The company uses straight-line depreciation to a book value of zero over the life of the project. The projected net income from the project is $1,000, $1,200, $1,500, and $1,700 a year for the next four years, respectively. What is the accounting rate of return (ARR)?

   	A.	4.28%
   	B.	4.13%
   	C.	14.21%
   	D.	3.55%
   	E.	7.11%

2. Your firm purchased a warehouse for $335,000 six years ago. Four years ago, repairs were made to the building at an additional cost. The warehouse has a current market value of $295,000. The warehouse is totally paid for and solely owned by your firm. If the company decides to assign this warehouse to a new project, what value, if any, should be included in the initial cash flow of the project for this building?

	A.	$40,000
	B.	$335,000
	C.	$295,000
	D.	Warehouse cost is not a relevant incremental cash flow.
	E.	$0