(Ignore Income Taxes in This Problem

Multiple Choice

(Ignore income taxes in this problem. ) The management of Burney Corporation is investigating purchasing equipment that would increase sales revenues by $74,000 per year and cash operating expenses by $32,000 per year.The equipment would cost $115,000 and have a 5 year life with no salvage value.The simple rate of return on the investment is closest to:

A) 36.5%
B) 25.7%
C) 20.0%
D) 16.5%