Calculate the accounting rate of return

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Reference no: EM132054444

Water World is considering purchasing a water park in Atlanta, Georgia, for $1,800,000. The new facility will generate annual net cash inflows of $457,000 for eight years.

Engineers estimate that the new facilities will remain useful for eight years and have no residual value.

The company uses straight-line depreciation, and its stockholders demand an annual return of 12% on investments of this nature.

Determine the formula and calculate the accounting rate of return? (ARR). ?(Round the percentage to the nearest tenth? percent, X.X%.)

Reference no: EM132054444

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