ABC, Inc is considering investing $4,000,000 in a project that is expected to generate $260,000 in annual net income for the next six years Depreciation expense on the projects assets is $170,000 per year Management would like its acceptable rate of return to be 18, and its acceptable payback period to be 3 years. 

A) Calculate the accounting rate of return Based on your result, should this project be accepted and Why? 

B) Calculate the payback period Based on your result, should this profit?

Answer rating: 100% (QA)

To calculate the Accounting Rate of Return ARR Average Return Av... View the full answer