A company is planning to purchase a machine that will cost $28,800, 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		$ 96,000
Costs:
Manufacturing	$ 50,300
Depreciation on machine	4,800
Selling and administrative expenses	36,000	(91,100)
Income		$ 4,900

Multiple Choice

• 10.21%.

• 4.80%.

• 34.03%.

• 50.00%.

• 33.33%.