A company is considering the purchase of new equipment for $480,000. The equipment will have a useful life of 4 years and no salvage value. The company estimates that the new equipment will provide $30,000 of after-tax net income each year after deducting $120,000 of annual depreciation expense. What is the accounting rate of return (ARR) for the new equipment? Select one: a. 62.5%. b. 12.5%. c. 31.25%. d. 16%. e. 6.25%