Arrowhead Inc. is considering an investment in new equipment that will be used to manufacture a mobile communications product. The product is expected to generate additional annual sales of 6,000 units at $266.00 per unit. The equipment has a cost of $669,600, residual value of $50,400, and an 8-year life. The equipment only can be used to manufacture the product. The cost to manufacture the product is shown next.

Cost per unit:
	Direct labor		$43.00
	Direct materials		169.00
	Factory overhead (including depreciation)		29.40
		Total cost per unit	$241.40

Determine the average rate of return on the equipment. fill in the blank 1 %