Use the following to answer questions
Seattle, Inc., is contemplating a project that costs $180,000. Expectations are that annual cash revenues will be $70,000 and annual expenses (including depreciation) will total $30,000. The project has a six-year useful life and a residual value of $30,000.
. The accounting rate of return for the project is
A) 66.7 percent.
B) 53.3 percent.
C) 38.1 percent.
D) 22.2 percent.
. The project’s payback period is
A) 2.57 years.
B) 2.14 years.
C) 2.31 years.
D) 2.77 years.