A company is considering purchasing a machine that costs $280,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the machine is purchased, annual revenues are expected to be $100,000 and annual operating expenses exclusive of depreciation expense are expected to be $38,000. The straight-line method of depreciation would be used.

If the machine is purchased, the annual rate of return expected on this machine is

a. 22.1%.

b. 44.3%.

c. 9.6%.

d. 19.3%.