Kenny Ltd$.$ is considering a project that would require a $$2,765,000$ investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $$200,000.$ The company$$s discount rate is $10\%.$ The project would provide net operating income each year as follows:

Sales $ $2,861,000$

Variable expenses $1,101,000$

Contribution margin $1,760,000$

Fixed expenses:

Advertising, salaries and other fixed out$-$of$-$pocket costs $ $705,000$

Depreciation $513,000$

Total fixed expenses $1,218,000$

Net operating income $ $542,000$

Required:

If the equipment$$s salvage value was $$400,000$ instead of $$200,000,$ what would be the project$$s simple rate of return? $($Round your answer to $2$ decimal places.$)$