Hammer Corporation wants to purchase a new machine for $285,000. Management predicts that the machine will produce sales of $290,0000 each year for the next 5 years. Expenses are expected to Include direct materials, direct labor, and factory overhead (excluding deprecation) totaling $89,000 per year. The firm uses straight-line deprecation with an assumed residual (salvage) value of $50,000. Hammer's combined Income tax rate, t, Is 40%. 

What is the estimated accounting (book) rate of return (ARR) for the proposed Investment, based on average Investment?  

Multiple Choice 

43%. 

45%. 

48%. 

55%. 

65%.