Baseball Ltd intends to introduce a new product that is expected to produce the following profits over

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Baseball Ltd intends to introduce a new product that is expected to produce the following profits over a period of six years.

The project will require the use of a machine that was purchased some years ago at a cost of $16 000 and the use of a second machine that will have to be purchased for $120 000. It is estimated that stock held will increase by $10 000, and debtors will increase by $15 000. 


Required

Calculate the accounting rate of return that will be earned from the new product.

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