Question
Youre trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $15
Youre trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $15 million, which will be depreciated straight-line to zero over its four-year life. Required: If the plant has projected net income of $1,235,000, $1,953,000, $1,783,000, and $1,130,000 over these four years, what is the projects average accounting return (AAR)? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Average accounting return %
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