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Average rate of return - new product Oahu Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The
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 units at $ per unit. The equipment has a cost of $ residual value of $ and an year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor $ Direct materials Factory overhead including depreciation Total cost per unit $ Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
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 units at $ per unit. The equipment has a cost of $
residual value of $ and an year life. The equipment can only be used to
manufacture the phone. The cost to manufacture the phone follows:
Cost per unit:
Direct labor
$
Direct materials
Factory overhead including depreciation
Total cost per unit
$
Determine the average rate of return on the equipment. If required, round to the
nearest whole percent.
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