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Average Rate of Return Lakeland Company is considering the purchase of equipment for $155,000....

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Accounting

Average Rate of Return
Lakeland Company is considering the purchase of equipment for $155,000. The equipment will expand the Company's production and increase revenue by $42,500 per year. Annual cash operating expenses will increase by $10,000. The equipment's useful life is 10 years with no salvage value. Lakeland uses straight-line depreciation. The income tax rate is 35%. What is the average rate of return on the investment?
Do not use negative signs with your answers.
\table[[Increase in revenue,$,],[Increase in expenses,,],[Pretax income from investment,,0],[Income tax expense,,0],[Net income from investment,$,0]]
Round answer to the nearest whole percentage, if applicable.
Average rate of return on investment
%
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