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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 phone

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 3,600 units at $254 per unit. The equipment has a cost of $334,800, residual value of $25,200, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows:
Line Item Description Amount
Cost per unit:
Direct labor $42.00
Direct materials 165.00
Factory overhead (including depreciation)29.00
Total cost per unit $236.00
Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
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