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A project has an initial cost of $420,000 and is expected to last for five years. This investment of $420,000 will be 100 percent depreciated
A project has an initial cost of $420,000 and is expected to last for five years. This investment of $420,000 will be 100 percent depreciated (straight line) over five years. The net income generated by the project is shown below: Year Net Income (S) 44,000 2 46,000 3 52,000 4 55,000 5 42,000 The company has a policy of accepting a project if the project has an average accounting return (AAR) of more than 20 percent. Should the company accept this project
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