A company buys a machine for $80,000 that has an expected life of 10 years and no salvage value. The company anticipates a yearly net income of $3,850 after taxes of 14%, with the cash flows to be received evenly throughout each year. What is the accounting rate of return?

Multiple Choice

• 1.35%.

• 9.63%.

• 48.13%.

• 4.81%.

• 8.28%.