Expand your business by building a new manufacturing plant

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Reference no: EM13913424

You’re trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $11.8 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,834,300, $1,887,600, $1,856,000, and $1,309,500 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: EM13913424

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