What is the project average accounting return

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Reference no: EM131309992

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 $21.4 million, which will be depreciated straight-line to zero over its four-year life.

If the plant has projected net income of $1,955,000, $2,215,000, $2,174,000, and $1,396,000 over these four years, what is the project’s average accounting return (AAR)? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Average accounting return %

Reference no: EM131309992

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