The following data concerns a proposed equipment purchase:

Cost $130,700

Salvage value $3,300

Estimated useful life 4years

Annual net cash flows $45,400

Depreciation method Straight-line

The annual average investment amount used to calculate the accounting rate of return is:

Multiple Choice

• $65,350
• $63,700
• $32,675
• $67,000
• $42,650