Question: Problem 10.10 Capitol Corp. management is expecting a project to generate after-tax income of $77,270 in each of the next three years. The average book

Problem 10.10

Capitol Corp. management is expecting a project to generate after-tax income of $77,270 in each of the next three years. The average book value of the projects equipment over that period will be $200,120. If the firms investment decision on any project is based on an ARR of 37.5 percent. (Round answer to 1 decimal places, e.g. 5.2%.) What is the projects accounting rate of return?

Should the firm accept this project?

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