What is the average accounting return on this project

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Reference no: EM132066823

The Even Cut Co. is considering opening a new plant to produce lawn mowers. The initial cost of the project is $6 million. This cost will be depreciated straight-line to a zero book value over the 15-year life of the project. The net income of the project is expected to be $137,000 a year for the first four years and $538,000 for years 5 through 15, respectively. What is the average accounting return on this project? why average net investment is 6000000/2 why needed to divided by 2?

Reference no: EM132066823

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