San Remo has a $4,000,000 asset investment and is subject to a 30% income tax rate.Cash inflows are expected to average $600,000 before tax over the next few years;in contrast,average income before tax is anticipated to be $500,000.The company's after-tax accounting rate of return is:

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The after-tax accounting rate of return is calculated as follows:After-tax accounting rate of return = (Average income before tax - Income tax) / Asset investment= ($500,000 - $150,000) / $4,000,000= $350,000 / $4,000,000= 8.75%

San Remo Has a $4,000,000 Asset Investment and Is Subject