6. Baboki Ltd are planning to invest in a new project which will cost an initial P375 000 and they expect the following cash.

Year Net Cash Profits (P)

1 25 000

2 55 000

3 70 000

4 80 000

5 40 000

6 30 000

The investment will be depreciated to a scrap value of P175, 000 over the period of the project.

Required:

Calculate the Accounting Rate of Return (Return on Capital Employed) of the project. (4 marks)