mountain frost is considering a new project with an initial cost of $185,000. the equipment will be depreciated on a straight-line basis to a zero book value over the four-year life of the project. the projected net income for each year is $19,600, $20,500, $24,600, and $16,500, respectively. what is the average accounting return?

The average annual return on an investment can be calculated by dividing the average lifetime revenues of a project by the average book value of the investment. For long-term stock market investments, the majority of investors would consider an average annual rate of return of 10% or above to be satisfactory. Just remember that it's only an average. There will be some years with lower returns, possibly even negative returns.

A four-year estimate of the total cost is used.

Forecasts of net income for each year and time

19600+20500+24600+16500 = 81200

Average estimate = 81200/4 = $20,300

Now average accounting return

Initial cost /2

185000/2

=$92500

Now the rate = total value/ average value

20300/92500

=21.94%

Read more about average accounting return on:

https://brainly.com/question/29244709?referrer=searchResults

#SPJ4