Current Attempt in Progress

A company is considering purchasing factory equipment that costs $$400000$ and is estimated to have no salvage value at the end of its

$5-$year useful life. If the equipment is purchased, annual revenues are expected to be $$157000$ and annual operating expenses exclusive of depreciation expense are expected to be $$23000.$ The straight$-$line method of depreciation would be used. If the equipment is purchased, the annual rate of return expected on this equipment is

$27\mathrm{.}00\%.$

$33\mathrm{.}50\%.$

$39\mathrm{.}25\%.$

$6\mathrm{.}70\%.$

which is correct answer