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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 6,300 units at $309 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:
Line Item Description Amount
Cost per unit:
Direct labor $54.00
Direct materials 208.00
Factory overhead (including depreciation)35.60
Total cost per unit $297.60
Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
fill in the blank 1 of 1%

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