Brady Service Center just purchased an automobile hoist for $31,310. The hoist has an 8-year life and an estimated salvage value of $3,780. Installation costs and freight charges were $3,870 and $800, respectively. Brady uses straight-line depreciation. The new hoist will be used to replace mufflers and tires on automobiles. Brady estimates that the new hoist will enable his mechanics to replace 6 extra mufflers per week. Each muffler sells for $73 installed. The cost of a muffler is $37, and the labor cost to install a muffler is $16.

Compute the annual rate of return for the new hoist