ABC Inc. is looking at investing in a 3-year project that will create earnings before depreciation of $7,000 in the first year, $8,000 in the second year, and $9,000 in the third year. The cost of this project is $18,000, which will be depreciated on a straight-line basis to zero over the next 3 years. The tax rate is 30% and the required return is 12%. What is the accounting rate of return of this project?

a.

15.56%

b.

16.67%

c.

12.23%

d.

14.45%

e.

13.34%