INFORMATION Malibu Limited intends purchasing a new machine and has the option of purchasing one of the following two machines: Machine A Machine B Cost R350 000 R350 000 Scrap value 0 0 Estimated useful life 4 years 4 years 12% 12% Cost of capital Net cash flows per year: R R End of: Year 1 100 000 130 000 Year 2 115 000 130 000 Year 3 145 000 130 000 Year 4 160 000 130 000 Average Annual profit: R42 500 R42 500 3.3 Calculate the Accounting Rate of Return on average investment) of Machine A (answer rounded off to 2 decimal places). (4 marks) 1