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Use this information to answer the next six questions Suppose a firm is considering investing in a project with the cash flows and net income

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Use this information to answer the next six questions Suppose a firm is considering investing in a project with the cash flows and net income shown below, that the required rate of return on projects of this risk class is 11.00%, and that the maximum allowable payback the company is 3 years. The required AAR is 25.00% Year Cash Flow Net Income Average BV 4 $122,000 $37,500 $65,800 $45,000 $84,000 $36,500 $141,000 $27,500 $81,200 $2,500 $235,000 $115,000 A. Use the AAR decision rule to evaluate this project, should it be accepted or rejected? Average Accounting Return Year Av 4 AAR Required AAR 25.00%

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