ABC Ltd. wants to undertake a project which would yield an annual profit (after tax and depreciation) of USD 260,000 for 8 years. The initial cost of the project would be

USD1000,000 and assets scrap value would have 180,000 at the end of project life. What would be the average rate of return (ARR) at the end of this project? Hint: ARR = (Annual profit after depreciation)/(Average annual investment)