What is the project average accounting return

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Reference no: EM131360024

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

If the plant has projected net income of $1, 935,000, $2, 205,000, $2, 154,000, and $1, 386,000 over these four years, what is the project's average accounting return (AAR)?

Average accounting return %

Reference no: EM131360024

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