Question
An investment has an initial cost of $300,000 and a life of four years. This investment will be depreciated by $60,000 a year and will
An investment has an initial cost of $300,000 and a life of four years. This investment will be depreciated by $60,000 a year and will generate the net income shown below. Should this project be accepted based on the average accounting rate of return (AAR) if the required rate is 9.5 percent? Why or why not?
| Year | Net Income |
|---|---|
| 1 | $ 14,500 |
| 2 | 16,900 |
| 3 | 19,600 |
| 4 | 23,700 |
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The Emerging Markets Handbook
Authors: Pran Tiku
1st Edition
0857192981, 978-0857192981
