A company is planning to purchase a machine that will cost $29,400, will have a six-year life, and will have no salvage value. The company expects to sell the machine's output of 3,000 units evenly throughout each year. A projected income statement for each year of the asset's life appears below. What is the accounting rate of return for this machine?

Sales		$ 97,000
Costs:
Manufacturing	$ 50,400
Depreciation on machine	4,900
Selling and administrative expenses	37,000	(92,300)
Income		$ 4,700

Multiple Choice

50.00%.

31.97%.

10.39%.

4.90%.

33.33%.