(Ignore income taxes in this problem.) Dum Luk & Stoo Pid has invested in a machine that cost $70,000, that has a useful life of seven years, and that has no salvage value at the end of its useful life. The machine is being depreciated by the straight-line method, based on its useful life. It will have a payback period of four years. Given these data, the simple rate of return on the machine is closest to:

A)

To calculate the simple rate of return on the machine, we need to determine the average annual net income generated by the machine and divide it by the initial investment.

First, let's find the annual net income. Since the machine has no salvage value at the end of its useful life and is being depreciated using the straight-line method, the annual depreciation expense would be $10,000 ($70,000 / 7 years).

To calculate the annual net income, we need to subtract the depreciation expense from the machine's annual revenue. However, we are not given any information about the machine's annual revenue or expenses, so we cannot directly calculate the net income.

To calculate the payback period, we divide the initial investment by the average annual net income. In this case, the payback period is four years.

Based on the given information, we don't have enough data to directly calculate the average annual net income or the simple rate of return. We would need additional information about the machine's annual revenue and expenses to calculate these values.

Therefore, we cannot determine the simple rate of return with the given information.