Metropolis Health Systems' Laboratory Director expects to purchase a new piece of equipment. The assumptions for the transaction are as follows:

Average annual net income = $70,000

Original investment amount = $410,000

Unrecovered asset cost at the end of useful life (salvage value) = $41,000

1.Compute the unadjusted rate of return using the original investment amount.

2.Compute the unadjusted rate of return using the average investment method.