The Patches Group has invested $39,000 in a high-tech project lasting three years. Depreciation is $13,300, $16,500, and $9,200 in Years 1, 2, and 3, respectively.
The project generates pretax income of $4,310 each year. The pretax income already includes the depreciation expense. The tax rate is 35 percent. What is the project’s average accounting return (AAR)? Get Finance homework help today