Calculating the project average accounting return

Reference no: EM132068184

Question: You're trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $19.0 million, which will be depreciated straight-line to zero over its four-year life. Required: If the plant has projected net income of $1, 835,000, $2, 155,000, $2, 054,000, and $1, 336,000 over these four years, what is the project's average accounting return (AAR)? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Reference no: EM132068184

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