Sommers Company is evaluating a project requiring a capital expenditure of $300,000. The project has an estimated life of 5 years and no salvage value. The estimated net income and net cash flow from the project are as follows:

Year	Net Income		Net Cash Flow
1	$60,000		$120,000
2	50,000		110,000
3	45,000		105,000
4	30,000		90,000
5	20,000		80,000
	$205,000		$505,000

The company's minimum desired rate of return for net present value analysis is 12%. The present value of $1 at compound interest of 12% is shown in the table below:

Year	Present Value of $1 at 12%
1	0.893
2	0.797
3	0.712
4	0.636
5	0.567

a. Determine the average rate of return on investment, giving effect to depreciation on the investment. Round your answer to two decimal places. %

b. Determine the net present value. $