Answer Happy

Average Rate of Return-New Product Hana 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 4,700 units at $176 per unit. The equipment has a cost of $393,400, residual value of $29,600, and an 8-year life. The equipment can only be used to manufacture the phone. The cost to manufacture the phone follows: Cost per unit: Direct labor $28.00 Direct materials 109.00 Factory overhead (including depreciation) 19.20 Total cost per unit $156,20 Determine the average rate of return on the equipment. If required, round to the nearest whole percent. %