Accounting Rate of Return

Cannon Company invested $8,000,000 in a new product line. The life cycle of the product is projected to be 8 years with the following net income stream: $400,000, $300,000, $700,000, $800,000, $1,100,000, $2,000,000, and $1,100,000.

Required:

Calculate the ARR. Enter your answer as a decimal, do not convert to a percent.

ARR=_________