What is the project average accounting return

Assignment Help Financial Management

Reference no: EM131504908

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 $23.4 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $2,055,000, $2,265,000, $2,274,000, and $1,446,000 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: EM131504908

Questions Cloud

What is diversification : One of the basic principles of finance is that all risk is not equal since some risk can be diversified away and some cannot. What is diversification?

What is horizontal and vertical mobility : What is horizontal and vertical mobility? How possible are these in American culture? And what about intergenerational mobility?

Modes of human inquiry and expression : How do you distinguish humanities from other modes of human inquiry and expression?

Projects by applying the irr rule : A firm evaluates all of its projects by applying the IRR rule.

What is the project average accounting return : You’re trying to determine whether or not to expand your business by building a new manufacturing plant. what is the project’s average accounting return (AAR)?

Imagine a racially democratic society : Imagine a racially democratic society. What would that look like? How would your daily life be different in such a society? Record your reflections.

Define the playround method with only the self parameter : Define the playRound method with only the self parameter. Make a call to another instance method called doRolls that takes no arguements.

Discuss a general overview of yourself : Discuss in detail the experience you had in class in the development of your academic and career-related skills.

Initial investment in fixed assets when evaluating project : What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

User Account

All Pages