2. 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 $20.2 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,895,000; $2,185,000; $2,114,000 and $1,366,000 over these 4 years, what is the project's average accounting return (AAR)? Please use excel and explain conclusion.
Ans ] Average Accounting return of the new project is 9.36% . If the AAR is more than the required return ,... View the full answer