Question
Average Rate of Return Lakeland Company is considering the purchase of equipment for $166,000. The equipment will expand the Company's production and increase revenue by
Average Rate of Return
Lakeland Company is considering the purchase of equipment for $166,000. The equipment will expand the Company's production and increase revenue by $52,000 per year. Annual cash operating expenses will increase by $10,000. The equipment's useful life is 10 years with no salvage value. Lakeland uses straight-line depreciation. The income tax rate is 35%. What is the average rate of return on the investment? Do not use negative signs with your answers. Increase in revenue Answer 13,000 Increase in expenses Answer 0 Pretax income from investment Answer 0 Income tax expense Answer 0 Net income from investment Answer 0 Round answer to the nearest whole percentage, if applicable. Average rate of return on investment Answer 0 %
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