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Aninitial investment of $40,000 in Sheridan's Bunks is expected to pay off greatly-but not equally-in each of the next 5 years. The compary expects a
Aninitial investment of $40,000 in Sheridan's Bunks is expected to pay off greatly-but not equally-in each of the next 5 years. The compary expects a small increase in operating income in year 1 of $5,500. but then steadily larber improvernents in probitability in years 2-5:\$10,750,\$19,375,\$19,500, and $22875, respectively. The year prior to this investment the companys ARR was 9% and its taxrate was 20% What level of ARR does this projection provide? (Round answer to 2 deciral places e. 15.25 ) ARR 46 Is it likely that the compary will move forward with this investment? eTextbook and Media
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