Ranger Enterprises Bought a Piece of Equipment for $64,000 That

Ranger Enterprises bought a piece of equipment for $64,000 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have a $3,000 salvage value at the end of its life. Straight-line depreciation is used. The income tax rate is 30%. What is the amount to be used in denominator in determining the accounting rate of return?

A) $12,200
B) $64,000
C) $13,400
D) $33,500