The following relates to a proposed equipment purchase: Cost $ 145,000 Salvage value $ 4,500 Estimated useful life 4 years Annual net cash flows $ 46,600 Depreciation method Straight-line Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:

Multiple Choice $12,600

$46,600

$45,475

$81,725

$11,475