Cardinal Company is considering a five-year project that would require a $2,945,000 investment in equipment with a useful life of five years and no salvage value. The companys discount rate is 18%. The project would provide net operating income in each of five years as follows:

Sales			$	2,873,000
Variable expenses				1,019,000
Contribution margin				1,854,000
Fixed expenses:
Advertising, salaries, and other fixed out-of-pocket costs	$	754,000
Depreciation		589,000
Total fixed expenses				1,343,000
Net operating income			$	511,000

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14. 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 projects actual payback period? (Round your answer to 2 decimal places.)

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 projects actual simple rate of return? (Round your answer to 2 decimal places.)