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 $16

You’re trying to determine whether or not to expand your business by building a new manufacturing plant. The plant has an installation cost of $16 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,643,000, $1,987,000, $1,523,000 and $1,308,000 over these four years, what is the project’s average accounting return (AAR)?

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