You're trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installati cost of $23 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $2,035,000, $2,255,000, $2,254,000, and $1,436,000 over these four years, what is the project's average accounting return (AAR)? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Average accounting return %
You're trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installati cost of $23 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $2,035,000, $2,255,000, $2,254,000, and $1,436,000 over these four years, what is the project's average accounting return (AAR)? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Average accounting return %
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 6P
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