Current Attempt in Progress

A company is considering purchasing factory equipment that costs $$400000$ and is estimated to have no salvage value at the end of $5-$year useful life. If the equipment is purchased, annual revenues are expected to be $$145000$ and annual operating expenses exclusive of depreciation expense are expected to be $$30000.$ The straight$-$line method of depreciation would be used. If the equipment is purchased, the annual rate of return expected on this equipment is

$17\mathrm{.}50\%.$

$36\mathrm{.}25\%.$

$28\mathrm{.}75\%.$

$5\mathrm{.}75\%.$