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Harris CoIs Considering a 12-Year Project That Is Estimated to Cost

Question 84

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Harris Co.is considering a 12-year project that is estimated to cost $900,000 and has no residual value.Harris seeks to earn an average rate of return of 15% on all capital projects.Determine the necessary average annual income (using straight-line depreciation) that must be achieved on this project for it to be acceptable to Harris Co.

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