Average rate of return$-$new 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 $6,300$ units at $$290$ per unit. The equipment has a cost of $$703,100,$

residual value of $$52,900,$ and an $8-$year life. The equipment can only be used to

manufacture the phone. The cost to manufacture the phone follows:

Cost per unit:

Direct labor

$$48\mathrm{.}00$

Direct materials

$188\mathrm{.}00$

Factory overhead $($including depreciation$)$

$33\mathrm{.}00$

Total cost per unit

$$269\mathrm{.}00$

Determine the average rate of return on the equipment. If required, round to the

nearest whole percent.

$\%$