The owner of a sporting goods store is considering remodeling the store to carry a larger inventory. The cost of remodeling and additional inventory is $60 000. The expected increase in net profit is $8000 per year for the next 4 years and $10 000 each year for the following 6 years. After 10 years, the owner plans to retire and sell the business. She expects to recover the additional $40 000 invested in inventory but not the $20 000 invested in remodeling. Compute the rate of return.