If the plant has projected net income of 1253000 1935000


Calculating AAR

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 $14 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,253,000, $1,935,000, $1,738,000, and $1,310,000 over these four years, what is the project's average accounting return (AAR)?

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Finance Basics: If the plant has projected net income of 1253000 1935000
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