Cardinal Company is considering a project that would require a $2,750,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. The company's discount rate is 18%. The project would provide net operating income each year as follows: Sales Variable expenses Contribution margin Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation Total fixed expenses Net operating income Simple rate of return $752,000 470,000 23.49 % $2,849,000 1,122,000 1,727,000 Required: If the equipment's salvage value was $600,000 instead of $400,000, what would be the project's simple rate of return? (Round your answer to 2 decimal places.)

Cardinal Company is considering a project that would require a $2,750,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $400,000. The company's discount rate is 18%. The project would provide net operating income each year as follows: Required: If the equipment's salvage value was $600,000 instead of $400,000, what would be the project's simple rate of return? (Round your answer to 2 decimal places.)