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 $4,100$ units at $$304$ per unit. The equipment has a cost of $$343,200,$ residual value of $$25,800,$ and an $8-$year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows:

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 $4,100$ units at $$304$ per unit. The

equipment has a cost of $$343,200,$ residual value of $$25,800,$ and an $8-$year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows:

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