Question
Could you please provide step by step instructions to this question please. Thank you. This is a question from a quiz that I am undertaking
Could you please provide step by step instructions to this question please. Thank you.
This is a question from a quiz that I am undertaking
You are considering a new product launch. The project will cost $680,000, have a four-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 100 units per year, price per unit will be $19,000, variable cost per unit will be $14,000, and fixed costs will be $150,000 per year. The required return on the project is 15%, and the relevant tax rate is 35%. Ignore the half-year rule for accounting for depreciation.
Calculate the Average Accounting Return (AAR in %)?
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