What is the project average accounting return

Assignment Help Financial Management

Reference no: EM131521106

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 $21.8 million, which will be depreciated straight-line to zero over its four-year life.

If the plant has projected net income of $1.975,000, $2.225.000, $2.194.000. and $1.406.000 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: EM131521106

Questions Cloud

What is the service life of an asset : How is the dictionary definition different from the accounting definition of depreciation?

Explain the law of increasing opportunity cost : Explain the law of increasing opportunity cost and its relationship to the shape of the production possibilities frontier

What negative effects do you think this borrowed money : What negative effects do you think this borrowed money could have on the US's economy (be very specific)

The events and causes that led to world war i : The events and causes that led to World War I.Articles on the rise of nationalism and imperialism in Germany and the other major powers involved in World War I.

What is the project average accounting return : which will be depreciated straight-line to zero over its four-year life. what is the project's average accounting return (AAR)?

Explain impact of the adjustment in the financial statement : A company like Golf USA that sells golf-related inventory typically will have inventory items such as golf clothing and golf equipment.

How much you leave as a tip : A friend has taken you out to lunch and you offer to leave the tip. The bill including the tax came to $38.85. How much you leave as a tip? Explain.

Department of health and human services : The single most important health policy choice in the United States over the past four decades has nothing to do with the Department of Health and Human Service

Corporate valuation-share of common stock is worth : Scampini Technologies is expected to generate $150 million in free cash flow next year and FCF is expected to grow at constant rate of 8% per year indefinitely

User Account

All Pages