3. A company is considering an investment proposal to install a new machine at a cost of `50,000. The facility has a life expectancy of 5 years with `5,000 salvage value. For the project additional working capital of `10,000 will also be required. The applicable income tax rate is 30%.

Estimated EBDIT from the proposal are: `20,000, `22,000, `19,000, `17,000 and `24,000 respectively for 5 years.

Compute the Accounting Rate of Return for the proposal.