Sherwood Limited is considering upgrading its plant to expand it client base. The financial details of the investment proposal are as follows: The cost of the plant is R3 600 000. This cost excludes the import duty of R900 000 and installation costs of R300 000. The net cash flows for the 10-year period are R1 400 000 per annum (excluding residual value). The residual value is R1 200 000. The company uses straight-line depreciation. The cost of capital for projects of similar risk is 18%. Ignore taxation. Required: 4.1 Calculate the investment's Accounting Rate of Return (ARR)