Average Rate of Return
Lakeland Company is considering the purchase of equipment for $ The equipment will expand the Company's production and increase revenue by $ per year. Annual cash operating expenses will increase by $ The equipment's useful life is years with no salvage value. Lakeland uses straightline depreciation. The income tax rate is What is the average rate of return on the investment?
Do not use negative signs with your answers.
tableIncrease in revenue,$Increase in expenses,,Pretax income from investment,,Income tax expense,,Net income from investment,$
Round answer to the nearest whole percentage, if applicable.
Average rate of return on investment
