The Foundational 15 [LO13-1, LO13-2, LO13-3, LO13-5, LO13-6]

Required information The Foundational 15 [L013-1, L013-2, LO13-3, L013-5, LO13-6] [T he following information applies to the questions displayed below. ] Cardinal Company is considering a ve-year project that would require a $2,955,000 investment in equipment with a useful life of ve years and no salvage value. The company's discount rate is 18%. The project would provide net operating income in each of five years as follows: Sales $2,865,000 Variable expenses 1,015,000 Contribution margin 1 , 850 , 00 0 Fixed expenses: Advertising, salaries, and other fixed out-ofpocket costs $ 750 , 000 Depreciation 591,000 Total fixed expenses 1,341,000 Net Operating income 5 509,000 I Click here to view Exhibit 138-1 and Exhibit 133-2, to determine the appropriate discount factor(s) using table. Foundational 13-15 15. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the project's actual simple rate of return? (Round your answer to 2 decimal places.) -%