Question 1

JD Corporation invested in project with the initial cost of RM100,000. This investment will be depreciated by RM25,000 a year over its 4 years' life. The net income is given as follows:

Year Net Income

1 RM7600

2 RM8000

3 RM9090

4 RM7700

What is the average accounting return (AAR) on this investment?

Question 2

If the amount of depreciation is reduced to RM15,000 a year and the company maintain the same target for AAR, should the company accept or reject the project?

JD Corporation invested in project with the initial cost of RM100,000. This investment will be depreciated by RM25,000 a year over its 4 years' life. The net income is given as follows: QUESTION 1 * 1 point What is the average accounting return (AAR) on this investment? If the amount of depreciation is reduced to RM15,000 a year and the company maintain the same target for AAR, should the company accept or reject the project? Accept the project Reject the project