Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows:

Initial investment	$	140,000
Useful life	$	10	years
Salvage value		10,000
Annual net income generated	$	3,400
FCA's cost of capital		6	%

Assume straight line depreciation method is used.

rev: 04_20_2017_QC_CS-86552

3.

value: 2.85 points

Required information

Required: Help FCA evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer to 2 decimal places.)