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A project has average net income of $ 5 , 9 0 0 a year over its 6 - year life. The initial cost of

A project has average net income of $5,900 a year over its 6-year life. The initial cost of the project is $98,000 which will be depreciated using straight-line depreciation to a book value of zero over the life of the project. The firm wants to earn a minimum average accounting return of 11.5 percent. The firm shouldthe project because the AAR ispercent.

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