McDougal Products is considering the purchase of new equipment to place in its factory. The equipment would cost $365,000, have a ten-year useful life and a salvage value at the end of its useful life of $65,000. The company estimates that annual revenues and expenses associated with the would be as follows:

Revenues				$	210,000
Less operating expenses:
Salaries	$	100,000
Depreciation		30,000
Maintenance		__20,000			__150,000
Net operating income				$	60,000

The simple rate of return on the new equipment is closest to:

	a.	30.0%
	b.	16.4%
	c.	20.0%
	d.	24.7%