Johnson Whole Distributors Has Invested in Equipment That Cost $120,000

Johnson Whole Distributors has invested in equipment that cost $120,000.The equipment has an 8-year life and no salvage value.Johnson uses straight-line depreciation.The equipment has a payback period of 5 years.The accounting rate of return is closest to

A) 5%
B) 6.25%
C) 7.8%
D) 7.5%