Jorelle Company's financial staff has been requested to review a proposed investment in new capital equipment. Applicable financial data is presented below. There will be no salvage value at the end of the investment's life and, due to realistic depreciation practices, it is estimated that the salvage value and net book value are equal at the end of each year. All cash flows are assumed to take place at the end of each year. For investment proposals, Jorelle uses a 12% after-tax target rate of return.

                  Investment Proposal

             Purchase       Annual    Net Annual

              Cost and     After-Tax    Net

Year        Book Value   Cash Flow  Income

0          $250,000      $   0     $    0

1            168,000     120,000   35,000

2            100,000     108,000   39,000

3             50,000       96,000   43,000

4             18,000       84,000   47,000

5                0          72,000   51,000

Discount Factors for a 12% Rate of Return:

                               Present Value of

              Present Value of     Annuity of $1

               $1 Received at    Received at End

Year          the End of Period  of Each Period

1                     .89           .89

2                     .80          1.69

3                     .71          2.40

4                     .64          3.04

5                     .57          3.61

6                     .51          4.12

The accounting rate of return on the average investment proposal is

A. 12.0%

B. 28.0%

C. 17.2%

D. 34.4%