Accounting Rate of Return

Thanda Company invested $7,500,000 in a new product line. The life cycle of the product is projected to be seven years with the following net income stream: $300,000, $300,000, $500,000, $900,000, $1,000,000, $2,100,000, and $1,200,000.

Required:

Calculate the accounting rate of return. Enter your answer as a decimal, do not convert to a percent. Round your answer to two decimal places.