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 6,000 units at $201 per unit. The equipment has a cost of $502,200, residual value of $37,800, 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	$33.00
Direct materials	127.00
Factory overhead (including depreciation)	20.75
Total cost per unit	$180.75

Determine the average rate of return on the equipment.