The Plastics Division of Minock Manufacturing currently earns $2.87 million and has divisional assets of $26 million. The division manager is considering the acquisition of a new asset that will add to profit. The investment has a cost of $5,472,000 and will have a yearly cash flow of $1,460,000. The asset will be depreciated using the straight-line method over a five-year life and is expected to have no salvage value. Divisional performance is measured using ROI with beginning-of-year net book values in the denominator. The companys cost of capital is 7 percent. Ignore taxes. The division manager learns that there is an option to lease the asset on a year-to-year lease for $1,174,000 per year. All depreciation and other tax benefits would accrue to the lessor.

Required:

What is the divisional ROI if the asset is leased?

Note: Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).