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Calculate the Accounting Rate of Return (ARR) for the following projects:

A project has an initial cost of $80,000. The project’s Earnings after tax (in USD) for the next 5 years is given below.
Year 1 2 3 4 5
Earnings after tax (in $) 10,000 10,000 30,000 25,000 20,000

Find out the Accounting Rate of Return (ARR) for the firm.


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