Hammer Corporation wants to purchase a new machine for $315,000. Management predicts that the machine will produce sales of $213,000 each year for the next 5 years. Expenses are expected to include direct materials, direct labor, and factory overhead (excluding depreciation) totaling $71,000 per year. The firm uses straight-line depreciation with an assumed residual (salvage) value of $50,000. Hammer's combined income tax rate, t, is 50%.

What is the estimated accounting (book) rate of return (ARR) for the proposed investment, based on average investment? (Round answer to nearest whole number/percentage.)

Multiple Choice 12%. 14%. 17%. 24%. 34%