Question: The Waitangi Group has invested 18 000 in a high tech project

The Waitangi Group has invested $18,000 in a high-tech project lasting three years. Depreciation is $5,300, $7,800, and $4,900 in years 1, 2, and 3, respectively. The project generates pretax income of $2,260 each year. The pretax income already includes the depreciation expense. If the tax rate is 25 percent, what is the project’s average accounting return (AAR)?

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  • CreatedOctober 01, 2015
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