A company is planning to purchase a machine that will cost $29,400 with a six-year life and 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$97,000Costs:Manufacturing$50,400Depreciation on machine4,900Selling and administrative expenses37,000(92,300)Income before taxes$4,700Income tax (35%)(1,645)Net income$3,055

Multiple Choice

• 33.33%.
• 10.39%.
• 50.00%.
• 4.90%.
• 20.78%.