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Unformatted text preview: nous if the initial clos You've ming to deten iding a new manufacturing plant. The plant sis million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,938,200, $2.201,600, $1.876,000, and $1.329,500 over these four years. what is the project's average accounting return (AAR)? A firm evaluates all of its projects by applying the IRR rule. If the required return is 16 percent, should the firm accept the following project? Year CF O -$34000 1 6000 2 1 8000 3 15000 ash flows in the previous problem, suppose the firm uses the NPV decision red return of 1 1 percent, should the firm accept this project?...
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