1. Pullman Farm and Factory is considering purchasing a new combine. The combine has the following details:
   • Cost of Combine = $80,000 (with no salvage value)
   • Useful life =10 years
   • Income before Depreciation = $16,000

Pullman Farm and Factory is going to use an Accounting Rate of Return to determine if it will buy the combine. What is the Accounting Rate of Return?

A. 10.00%

B. 8.00%

C. 5.00%

D. 4.00%

E. None of the Above