A) Capitol Corp. management is expecting a project to generate after-tax income of $66,190 in each of the next three years. The average book value of the projects equipment over that period will be $212,570. If the firms investment decision on any project is based on an ARR of 37.5 percent

Accounting rate of return is

:

B) Hathaway, Inc., a resort management company, is refurbishing one of its hotels at a cost of $7,053,259. Management expects that this will lead to additional cash flows of $1,610,000 for the next six years. What is the IRR of this project? If the appropriate cost of capital is 12 percent, should Hathaway go ahead with this project?

The IRR of this project is: