Answer:
D) 15.76 percent
Explanation:
First, sum up the expected cash inflows;
= (95,000 + 162,000 + 286,000 + 304,000)
= 847,000
Next, find average cash inflows by dividing 847,000 by 4 years;
= 847,000/4
= 211,750
Initial amount invested = 2,687,300
Find the average amount by dividing 2,687,300 by 2
= 2,687,300/2
= 1,343,650
To find average accounting return, divide 211,750 by 1,343,650;
= 211,750 / 1,343,650
= 0.15759
As a percentage, it becomes 15.76%
