Nylan Tiles Company is considering an investment in new equipment costing $850,000. The equipment will be depreciated on a straight line basis over 5 year life and is expected to have a salvage value of $50,000. The equipment is expected to generate net cash inflows of $1,000,000 in total during the 5 year life. What is the account rate of return associated with the equipment investment?
A) 8.89%
B) 9.32%
C) 7.56%
D) 9.99%