An initial investment of $60,000 in Splish's Bunks is expected to pay off greatly-but not...
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An initial investment of $60,000 in Splish's Bunks is expected to pay off greatly-but not equally-in each of the next 5 years. The company expects a small increase in operating income in year 1($4,625), but then steadily larger improvements in profitability in years 25:$10,875,$19,000,$21,250, and $25,625, respectively. The year prior to this investment, the company's ARR was 9%, and its tax rate was 20% What level of ARR does this projection provide? (Round answer to 2 decimal places, e.g. 15.25\%.) ARR % Is it likely that the company will move forward with this investment
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