Find what the average accounting rate of return or aar is

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Reference no: EM132691872

A firm is considering a project with an initial investment of $3,000,000. The initial investment will have a useful life of 4 years and no salvage value. Net income for each year are as follows:

Year 1 = $0
Year 2 = $200,000
Year 3 = $250,000
Year 4 = $300,000

Problem 1: The average accounting rate of return (AAR) is:

Select one:

a. 8.3%
b. 16.7%
c. 12.5%
d. 17%

Reference no: EM132691872

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