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

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

Year

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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. Explain the differences between fixed and flexible budgets and their relevance in evaluating operational performance.

Year123456NetCashProfits(P)250005500070000800004000030000

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