About the average accounting return

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Reference no: EM13923005

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $13 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,954,300, $2,007,600, $1,976,000, and $1,429,500 over these four years, what is the project’s average accounting return (AAR)? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Average accounting return %

Reference no: EM13923005

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