The following relates to a proposed equipment purchase:

Initial investment	$ 144,000
Salvage value	$ 4,000
Estimated useful life	4	years
Annual net cash flows	$ 46,100
Annual depreciation expense	$ 35,000

Assuming that net cash flows are received evenly throughout the year, the accounting rate of return is:

Multiple Choice

• 62.3%.

• 32.0%.

• 15.0%.

• 7.7%.

• 5.0%.