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 $17.8 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,775,000, $2,125,000, $1,994,000, and $1,306,000 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 96
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 $17.8 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,775,000, $2,125,000, $1,994,000, and $1,306,000 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 96
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 4P
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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 $17.8 million, which will be depreciated straightline to zero over its four-year life, fthe plant has projected net income of $1,775,000, 52,125,000, 1,994,000, and §1,306,000 over these four years, what s the project’s average accounting return (AARY? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average accounting return %
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