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Mercury Corporation is considering an investment that will cost $180,000 and last for three years. The investment will be amortized on a straight-line basis over
| Mercury Corporation is considering an investment that will cost $180,000 and last for three years. The investment will be amortized on a straight-line basis over that period. Earnings generated by the investment before amortization and taxes over this period are as follows: | |||||
| Year 1 | $ 90,000.00 | ||||
| Year 2 | 100,000.00 | ||||
| Year 3 | 125,000.00 | ||||
| Mercury Corporation has a tax rate of 40 percent. What is the average accounting return of this project? | |||||
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Analysis for Financial Management
Authors: Robert C. Higgins
10th edition
007803468X, 978-0078034688
