Nicks Novelties, Inc., is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $570,000, have an eight-year useful life, and have a total salvage value of $57,000. The company estimates that annual revenues and expenses associated with the games would be as follows:

Revenues

$

240,000

Less operating expenses:

Commissions to amusement houses

$

70,000

Insurance

45,000

Depreciation

64,125

Maintenance

30,000

209,125

Net operating income

$

30,875

2a.	Compute the simple rate of return promised by the games. (Round your answer to 1 decimal place. i.e. 0.123 should be considered as 12.3%.)