Copa Cabana Corporation Is Considering the Purchase of a New

Copa Cabana Corporation is considering the purchase of a new machine costing $30,000. The machine would generate net cash inflows of $12,000 per year for 5 years. At the end of 5 years, the machine would have no salvage value. Copa Cabana's cost of capital is 12 percent. Copa Cabana uses straight-line depreciation.
The investment's accounting rate of return on initial investment is:

A) 12.28 percent
B) 10.27 percent
C) 20.00 percent
D) 30.55 percent