A company is considering purchasing factory equipment that costs $$500000$ and is estimated to

have no salvage value at the end of its $5-$year useful life. If the equipment is purchased, annual

revenues are expected to be $$153000$ and annual operating expenses exclusive of depreciation

expense are expected to be $$22000.$ The straight$-$line method of depreciation would be used. If

the equipment is purchased, the annual rate of return expected on this equipment is

$12\mathrm{.}40\%.$

$26\mathrm{.}20\%.$

$30\mathrm{.}60\%.$

$5\mathrm{.}24\%$