Purple Pumpkins Inc is considering purchasing a pumpkin carving machine with a cost of $320,000 and a salvage value equal to zero at the end of its 8-year useful life. If the machine is purchased, annual revenues are projected to be $98,000 and annual operating expenses exclusive of amortization expense are expected to be $38,000. The straight-line method of amortization would be used.

If the machine is purchased, the annual rate of return expected is

Select one:

a. 8%

b. 5.33%

c. 5.00%

d. 16.3%

e. None of the above