Detroit Company, an American chemical company, is planning to buy new equipment to expand their production of a popular solvent. Estimated data are as follows: $370,000 Cash cost of new equipment now Estimated life in years Terminal salvage value 10 years $ 50,000 Incremental revenues per year $330,000 Incremental expenses per year other than depreciation $165,000 Assume a 60% flat rate for income taxes. The company receives all revenues and pays all expenses other than depreciation in cash. Use a 14% discount rate. Assume that the company uses ordinary straight line depreciation based on a 10-year recovery period for tax purposes. Taxes are paid as incurred. Also assume that the company depreciates the original cost less the terminal salvage value. Compute the ARR average investment cost. A 14% B. 20% OC Cannot calculate D. none of the above