A New Manufacturing Machine Is Expected to Cost $278,000, Have

Multiple Choice

A new manufacturing machine is expected to cost $278,000, have an eight-year life, and a $30,000 salvage value. The machine will yield an annual incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the accounting rate of return for the investment.

A) 22.7%.
B) 24.5%.
C) 12.2%.
D) 46.9%.
E) 23.4%.