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What is the minimum annual operating income

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Question - GlenGary Investment Corporation is analyzing a proposal to build condo units in southern Florida. The project will require an initial investment of $500,000. The building has a useful life of 20 years, a residual value of $200,000, and is depreciated on a straight-line basis. GlenGary uses the accounting rate of return model to evaluate investment projects. What is the minimum annual operating income that must be generated by this project to achieve the 9% accounting return required by GlenGary?

A) $18,000

B) $45,000

C) $27,000

D) $25,000

Reference no: EM131589911

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