Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $120,000 with a $10,000 residual value and a five-year life. The equipment will replace three employees who has an average total wages of $47,310 per year. In addition, the equipment will have operating and energy costs of $11,660 per year.

Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. fill in the blank ______ %