16.

An investment has an initial cost of $3 million. This investment will be depreciated by $800,000 a year over the three-year life of the project. Should this project be accepted based on the average accounting rate of return if the required rate is 9.0 percent? The investment is expected to generate the following net incomes:

Net Income Year1 = $200,000, Net Income Year2= $180,000, Net Income Year3=$160,000

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