FINANCE
FIN 226 Introduction to Finance 10
Chapter 8 Homework
2.
value:
4.16 points
Question 2 (of 6)
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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 $22.2 million, which will be depreciated straight-line to zero over its four-
year life.
If the plant has projected net income of $1,995,000, $2,235,000, $2,214,000, and $1,416,000 over these four years, what is the project's average accounting return (AAR)? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Avergae accounting return
%