Carmino Company is considering an investment in equipment that is expected to generate an after-tax income of $6,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 40% tax bracket. The net book value (NBV) of the investment at the beginning of each year is expected to be as follows:$\begin{array}{lr}
\text { Year 1 } & \$30,000 \
\text { Year 2 } & 15,000 \
\text { Year 3 } & 7,500 \
\text { Year 4 } & 3,750
\end{array}$Calculate this asset's accounting (book) rate of return (ARR) on average investment (which is defined as a simple average of the average book value of the asset for each year of its four-year life). Round the final answer to the nearest whole %.
A) 15%.
B) 27%.
C) 36%.
D) 43%.
E) 58%.

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The Answer of Carmino Company is considering an investment in equipment that is expected to generate an after-tax income of $6,000 for each year of its four-year life. The asset has no salvage value. The firm is in the 40% tax bracket. The net book value (NBV) of the investment at the beginning of each year is expected to be as follows:$\begin{array}{lr}
\text { Year 1 } & \$30,000 \
\text { Year 2 } & 15,000 \
\text { Year 3 } & 7,500 \
\text { Year 4 } & 3,750
\end{array}$Calculate this asset's accounting (book) rate of return (ARR) on average investment (which is defined as a simple average of the average book value of the asset for each year of its four-year life). Round the final answer to the nearest whole %.
A) 15%.
B) 27%.
C) 36%.
D) 43%.
E) 58%.