Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals:   3D Printer Truck Amount of investment $76,000     $40,000   Useful life 4 years     9 years   Estimated residual value 0     0   Estimated total income over the useful life $11,400     $18,900   Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. 3D Printer fill in the blank 1 % Truck fill in the blank 2 %

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 3PB: Net present value method, present value index, and analysis for a service company First United Bank...
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  1. Average Rate of Return

    The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals:

      3D Printer Truck
    Amount of investment $76,000     $40,000  
    Useful life 4 years     9 years  
    Estimated residual value 0     0  
    Estimated total income over the useful life $11,400     $18,900  

    Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place.

    3D Printer fill in the blank 1 %
    Truck fill in the blank 2 %
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