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Consider the following abbreviated financial statements for a proposed investment:
Year 0 1 2 3 4
Gross Book Value $160 $160 $160 $160 $160
Accumulated Dep. 40 80 120 160
Net Book Value $160 $120 $80 $40 $0
Sales $95 $90 $97 $80
Costs 33 30 25 10
Depreciation 40 40 40 40
Taxes (50%) $11 $10 $16 $15
Net Income $11 $10 $16 $15
What is the average accounting return (AAR) for proposed investment? This project will use straight-line
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