Brent Corporation is considering purchasing a machine for $2,000,000. It is expected that the machine will generate afte

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Brent Corporation is considering purchasing a machine for
$2,000,000. It is expected that the machine will generate after-tax
income of $80,000 per year. The company will use straight-line
depreciation for the new machine over the machine's useful life of
10 years; salvage value is estimated as $0. Brent expects to be in
the 30% tax bracket.
What is the new machine's book (accounting) rate of return based
on average investment?
A) 6.35%
B) 7.50%
C) 8.00%
D) 10.00%
E)
12.00%