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Accounting rate of return of project

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ABC Inc. is looking at investing in a 3-year project that will create earnings before depreciation of $7,000 in the first year, $8,000 in the second year, and $9,000 in the third year. The cost of this project is $18,000, which will be depreciated on a straight-line basis to zero over the next 3 years. The tax rate is 30% and the required return is 12%. What is the accounting rate of return of this project?

Reference no: EM132540620

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