Renzoni Incorporated, has invested in new pasta manufacturing equipment at a cost of $72,000. The equipment has an estimated useful life of eight years. Estimated annual sales and operating expenses related to the pasta equipment follow: Annual sales $ 132,000 Labor costs (108,000) Depreciation of equipment (9,000) Operating income $ 15,000 Income taxes (6,000) Net income $ 9,000 The estimated accounting rate of return is:

Multiple Choice

22.2%.

18.0%. Incorrect 1

2.5%.

25.0%.Incorrect