Average Rate of Return Clancy Company is considering the purchase of equipment for $100,000. The equipment will expand the company's production and increase revenue by $30,000 per year. Annual cash operating expenses will increase by $8,000. The equipment's useful life is 10 years with no salvage value. Clancy uses straight-line depreciation. The income tax rate is 35%. What is the average rate of return on the investment? Do not use negative signs with your answers. Increase in revenue 30,000 Increase in expenses 10,800 X 19,200 (7,700) 14,300 X Pretax income from investment Income tax expense Round answer to the nearest whole percentage, if applicable Average rate of return on investment 114.3 X % Check