Average Rate of Return-New Product Arrowhead Inc. is considering an investment in new equipment that will be used to manufacture a mobile communications product. The product is expected to generate additional annual sales of 7,200 units at $255.00 per unit. The equipment has a cost of $602,600, residual value of $45,400, and an 8-year life. The equipment only can be used to manufacture the product. The cost to manufacture the product is shown next. Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) Total cost per unit Determine the average rate of return on the equipment. $43.00 167.00 29.25 $239.25 %