Sigma Company is considering a new investment that costs $700,000, has a 10 year life and no salvage value. Below is an income statement related to the investments estimated annual revenues and expenses. Sales $515,000 Variable Expenses 230,000 Contribution Margin $285,000 Fixed Expenses Out of pocket cash expenses $125,000 Depreciation 70,000 195,000 Net operating income $ 90,000 The simple rate of return for this investment is closest to:

2.86%

17.48%

22.86%

12.86%