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	$	190,000
Useful life	$	10	years
Salvage value		20,000
Annual net income generated	$	4,400
FCA's cost of capital		6	%

Assume straight line depreciation method is used.

References

Section BreakPA11-4 Calculating Accounting Rate of Return, Payback Period, Net Present Value, Estimating Internal Rate of Return [LO 11-1, 11-2, 11-3, 11-4]

5.

value: 1.11 points

Required information

PA11-4 Part 1

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