The Warren Company is considering investing in two alternative? projects:

	Project 1	Project 2
Investment	?$400,000	?$250,000
Useful life? (years)	5	6
Estimated annual net cash inflows for useful life	?$100,000	?$45,000
Residual value	?$25,000	?$15,000
Depreciation method	Straightminus?line	Straightminus?line
Required rate of return	?12%	?8%

What is the accounting rate of return for Project? 1?

A.

?1.88%

B.

?43.75%

C.

?6.25%

D.

?25.00%