Group 9 investment PLC is asked to advice the managing director of an investment proposal with the following data:

• Initial investment = 500m
• Lifespan of busines =7 yrs
• Scrap value =150m

Estimated annual inflows are as follows:

Yr	Cash flow
1	130m
2	150m
3	170m
4	190m
5	210m
6	230m
7	250m

If the company expected rate of return is 38.5% and corporate tax is 36.5% calculate the average rate of return giving that the company practice over the years has been straight line depreciation method.