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Average rate of returnnew product Oahu Inc. is considering an investment in...

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Accounting

Average rate of returnnew product
Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is expected to generate additional annual sales of 4,800 units at $198 per unit. The equipment has a cost of $401,800, residual value of $30,200, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows:
Line Item Description Amount
Cost per unit:
Direct labor $34.00
Direct materials 130.00
Factory overhead (including depreciation)22.30
Total cost per unit $186.30
Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
fill in the blank 1 of 1
%

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