Latimer Corporation Is Considering Two Alternative Investment Proposals with the Following

Latimer Corporation is considering two alternative investment proposals with the following data: $\begin{array}{|l|r|r|}\hline & \text { Proposal X } & \text { Proposal Y } \\\hline \text { Investment } & \$ 812,500 & \$ 390,000 \\\hline \text { Useful life } & 8 \text { years } & 8 \text { years } \\\hline \begin{array}{l}\text { Estimated annual net } \\\text { cash inflows for 8 years }\end{array} & \$ 125,000 & \$ 78,000 \\\hline \text { Residual value } & \$ 40,000 & \$ \\\hline \text { Depreciation method } & \text { Straight-line } & \text { Straight-line } \\\hline \text { Required rate of return } & 14 \% & 10 \% \\\hline\end{array}$

- What is the accounting rate of return for Proposal Y?

A) 7.50 %
B) 8.78 %
C) 20.00 %
D) 32.50 %