Rate of return

Hi Mr john,

I was going through the open tuition mock exam for F2 and in section B Question 1 , they ask to find the accounting rate of return and i tried to find it but i wasn’t able to ,

secondly, why do we have to subtract incremental costs from the cash flows each year and then find the net present value.

and will i be tested on any other types of relevant costs in in non theory questions?

my exam is in 4 days i would be thankful if you help 🙂