What is the project average accounting return

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Reference no: EM133209510

Question

Brighton Ltd is evaluating an expansion of its business by purchasing new manufacturing equipment. The equipment has an installation cost of $500 000. There will be cash inflows in each of the five years of the project of $280,000, $300,000, $290,000, 310,000 and $300,000, respectively. The equipment for the Brighton Ltd is expected to have a salvage value of $100,000 at the end of five years. What is the project's average accounting return (AAR)?

Reference no: EM133209510

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