What is the project average accounting return

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Reference no: EM131312916

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 $19.4 million, which will be depreciated straight-line to zero over its four-year life.

Required:

If the plant has projected net income of $1,855,000, $2,156,842, $2,074,000, and $1,346,000 over these four years, what is the project’s average accounting return (AAR)? (Do not include the percent sign (%).Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM131312916

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