Blaine Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled machine. The new machine would cost $280,000 and would have a ten-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost $46,000 per year to operate and maintain, but would save $87,000 per year in labor and other costs. The old machine can be sold now for scrap for $28,000. The simple rate of return on the new machine is closest to: (Ignore income taxes in this problem.)

4.64%

5.16%

31.07%

10.32%