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You're trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $12.1 million, which will be depreciated straight-line to zero over its four-year life. If the plant has projected net income of $1,864,300, $1,917,600, $1,886,000, and $1,339,500 over these four years,

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Question: What is the project's average accounting return (AAR)?

Note: Please explain comprehensively and give step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172480

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