Calculate the accounting rate of return

Reference no: EM131884745

Problem

The Johnson Company is considering investing in a wind turbine to generate its own power. Any unused power will be sold back to the local utility company. Between cost savings and new? revenues, the company expects to generate $893,000 per year in net cash inflows from the turbine. The turbine would cost $ 4.7 million and is expected to have a 20?-year useful life with no residual value. Calculate the accounting rate of return? (ARR). First enter the formula, then calculate the accounting rate of return (ARR). (Enter amounts in the formula as whole dollars and not in millions. Enter the ARR as a percentage rounded to two decimal places, X.XX%.)

Reference no: EM131884745

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