Cardinal Company is considering a project that would require a $2,800,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $300,000. The companys discount rate is 14%. The project would provide net operating income each year as follows:

Sales $ 2,845,000

Variable expenses 1,109,000

Contribution margin 1,736,000

Fixed expenses:

Advertising, salaries, and other fixed out-of-pocket costs $ 799,000

Depreciation 500,000

Total fixed expenses 1,299,000

Net operating income $ 437,000

Required:

If the equipments salvage value was $500,000 instead of $300,000, what would be the projects simple rate of return? (Round your answer to 2 decimal places.

Simple rate of return ????