(2) The management of River Corporation is considering the purchase of a new machine costing $380,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment:

Year Income from Operations Net Cash Flow

1 $20,000 $95,000

2 20,000 95,000

3 20,000 95,000

4 20,000 95,000

5 20,000 95,000

What is the average rate of return for this investment?