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Average Rate of Return-New Product Galactic Inc. is considering an investment in new equipment that will be used to manufacture a smartphone. The phone is

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Average Rate of Return-New Product Galactic 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 6,000 units at $250 per unit. The equipment has a cost of $850,000, residual value of $50,000, and an eight-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the plane follows: Cost per unit: Direct labor Direct materials Factory overhead (including depreciation) 15.00 134.00 33.50 $182.50 Total cost per unit Determine the average rate of return on the equipment. If required, round to the nearest whole percent. 47.65 X 96

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