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Vedanta Resources has invested 8 million in a new mining project lasting 3 years. Depreciation is charged on a straight-line basis to zero over the

Vedanta Resources has invested £8 million in a new mining project lasting 3 years. Depreciation is charged on a straight-line basis to zero over the course of the project. The project generates a pre-tax income of £2 million each year. The pre-tax income already includes the depreciation expense. If the tax rate is 23 percent, what is the project’s average accounting return (AAR)?

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