A company buys a machine for $68,000 that has an expected life of 8 years and no salvage value. The company anticipates a yearly net income of $3,250 after taxes of 36%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return?

3.44%.

4.78%.

9.56%.

6.12%.

38.24%.

Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $1.80 and total fixed costs are $10,000. The cat food can be sold as it is for $9.00 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,000 cost. The additional processing will yield 10,000 bags of Premium Green and 3,000 bags of Green Deluxe, which can be sold for $8 and $6 per bag, respectively. If Green Health is processed further into Premium Green and Green Deluxe, the total gross profit would be: