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Business, 03.06.2021 18:00 jennifercastillo1233

Midwest Fabricators Inc is considering an investment in equipment that will replace direct labor. The equipment has a cost of $114,000 with a 10,000 residual value and a five-year life. The equipment will replace one employee who has an average wage of $40,500 per year. In addition, the equipment will have operating and energy costs of $11,020 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment. If required, round to the nearest whole percent.

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