Gleason and Company is planning to invest $5 million in a new, stand-alone project. Before depreciation, it

Question:

Gleason and Company is planning to invest $5 million in a new, stand-alone project. Before depreciation, it expects this project to yield a positive cash flow of $1.4 million each year for five years. The firm expects to depreciate the investment on a straight-line basis over five years and with zero . The applicable is 12% and the tax rate is 30%.

Required:
a. What is the on this project?
b. What is the modified on this project?
c. What is the project’s accounting rate of return?

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