Exercise 24-5 (Algo) Accounting rate of return LO P2 Information for two alternative projects involving machinery investments follows: Initial investment Salvage value Annual income Project 1 $ (135,000) 0 16,875 Project 2 $ (105,000) 15,000 15,600 a. Compute accounting rate of return for each project. b. Based on accounting rate of return, which project is preferred? Complete this question by entering your answers in the tabs below. Required A Required B Compute accounting rate of return for each project. Numerator: Accounting Rate of Return 1 Denominator: / Annual income Annual income Accounting rate of return 0 Project 1 Project 2 0 Required A Required B