Splish Inc. is considering modernizing its production facility by investing in new equipment and selling the old equipment. The following information has been collected on this investment: Old Equipment New Equipment Cost $81,520 Cost $38,800 Accumulated depreciation $40,400 Estimated useful life 8 years Remaining life 8 years Salvage value in 8 years $4,600 Current salvage value $10,720 Annual cash operating costs $30,100 Salvage value in 8 years $0 Annual cash operating costs $35,300 Depreciation is $10,190 per year for the old equipment. The straight-line depreciation method would be used for the new equipment over an eight-year period with salvage value of $4,600. What is the annual rate of return? Answer is 4.26. But explain me the steps ?