Question - A company is considering purchasing factory equipment which costs $960,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be $450,000 and annual operating expenses exclusive of depreciation expense are expected to be $190,000. The straight-line method of depreciation would be used. If the equipment is purchased, the annual rate of return expected on this project is:
A. 54.2%.
B. 29.2%.
C. 27.1%.
D. 14.6%.