Micro Tek 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 4,000 units at $450 per unit. The equipment has a cost of $3,950,000, residual value of $50,000, 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 $20 Direct materials 205 Factory overhead (including depreciation) 39 Total cost per unit $264 Determine the average rate of return on the equipment. Round your answer to one decimal place. %
Micro Tek 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 4,000 units at $450 per unit. The equipment has a cost of $3,950,000, residual value of $50,000, 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 $20 Direct materials 205 Factory overhead (including depreciation) 39 Total cost per unit $264 Determine the average rate of return on the equipment. Round your answer to one decimal place. %
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 3E: Average rate of returnnew product Hana Inc. is considering an investment in new equipment that will...
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