1). Pocket Pilot Inc. is considering an investment in new equipment that will be used to manufacture a mobile communications device. The device is expected to generate additional annual sales of 4,500 units at $246.00 per unit. The equipment has a cost of $460,400, residual value of $34,600, and an eight-year life. The equipment can only be used to manufacture the device. The cost to manufacture the device is shown below.

Cost per unit:
	Direct labor		$41.00
	Direct materials		159.00
	Factory overhead (including depreciation)		26.75
		Total cost per unit	$226.75

*Determine the average rate of return on the equipment. If required, round to the nearest whole percent.