Fast Food, Inc., has purchased a new donut maker. It cost $16,000 and has an estimated life of 10 years. The following annual donut sales and expenses are projected (Ignore income taxes.): $ 22,000 Sales Expenses: Flour, etc., required in making donuts Salaries Depreciation Net operating income $10,000 6,000 1,600 17,600 $ 4,400 Assume cash flows occur uniformly throughout a year except for the initial investment. The simple rate of return for the new machine is closest to: Multiple Choice 0 20% 37.5% 27.5% 80.0%