Garrison Appliances, Inc., is considering expanding its international presence. It sells 25% of all the toaster ovens sold in the United States, but only 3% of the toaster ovens sold outside of the United States. The company believes that it can sell more of its product if it has a production facility located overseas. Estimates concerning two possible locations, Mumbai and Bangalore, follow:

Possible Location	Mumbai	Bangalore
Initial cash outlay	$5,000,000	$2,800,000
Useful life	20 years	20 years
Net cash inflows excluding depreciation	$1,100,000	$860,000
The cost of capital	9%	9%
Tax rate	40%	40%

	Net Income	Cash Flow
Annual cash savings	$1,100,000	+$1,100,000
Depreciation($5,000,000/20)	250,000
Income before tax	$850,000
Tax, 40%	340,000	-340,000
Net Income	$510,000
Annual Net cash flow		$760,000

What is

Average rate of return on investment:? Average Investment is (initial cash outlay) / 2 = $x,xxx,xxx (net income) / $x,xxx,xxx =