Question
Pocket Pilot Inc. is considering an investment in new equipment that will be used to manufacture a mobile communications device. The device is expected to
Pocket Pilot Inc. is considering an investment in new equipment that will be used to manufacture a mobile communications device. The device is expected to generate additional annual sales of 7,200 units at $182.00 per unit. The equipment has a cost of $602,600, residual value of $45,400, and an eight-year life. The equipment can only be used to manufacture the device. The cost to manufacture the device is shown below. Cost per unit: Direct labor $30.00 Direct materials 116.00 Factory overhead (including depreciation) 19.35 Total cost per unit $165.35 Determine the average rate of return on the equipment. If required, round to the nearest whole percent.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started