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)