Average Rate of Return Lakeland Company is considering the purchase of equipment for $166,000....
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Average Rate of Return Lakeland Company is considering the purchase of equipment for $166,000. The equipment will expand the Company's production and increase revenue by $52,000 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.
Increase 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
Answer
%
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