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Falcon Crest Aces (FCA), Inc., s considering the purchase of a small plane to use in its wing-walking demonstrations and $ 150,000 $10 years Initial investment Useful life Salvage value Annual net income generated FCAs cost of capita 20,000 $ 3,600 10% Assume straight line depreciation method is used. 4 value 1.00 polnts Required: Help FCA evaluate this project by calculating each of the following 1. Accounting rate of return (Round our answer to 2 decimal places) ccounting Rate of Return
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Answer #1

Accounting rate of return = Annual net income / Initial investment = $3,600 / $150,000 = 2.40%

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