Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below. (perform all calculation using 5 significant figures, and give your finalanswer to 1 decimal place).

(a)What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison.

Smoothie Creamie

First Cost 15,000 37,000

Service Life 12 years 12 years

Annual Profit 4,400 11,200

Annual operating cost 1,600 3,820

Salvage value 2,250 5,200

A MARR which makes the two alternatives equivalent in term of PW is

____________%