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Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Amount of investment Useful life Estimated residual value Estimated total income over the useful life Testing Equipment Diagnostic Software $28,000 4 years $40,000 9 years $0 $2,800 $0 $16,200 Determine the expected average rate of retur for each proposal. If required, round to one decimal place. Testing Equipment Diagnostic Software % %

Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Amount of investment Useful life Estimated residual value Estimated total income over the useful life Testing Equipment Diagnostic Software $28,000 4 years $40,000 9 years $0 $2,800 $0 $16,200 Determine the expected average rate of retur for each proposal. If required, round to one decimal place. Testing Equipment Diagnostic Software % %

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Amount of investment Useful life Estimated residual value Estimated total income over the useful life Testing Equipment Diagnostic Software $28,000 4 years $40,000 9 years $0 $2,800 $0 $16,200 Determine the expected average rate of retur for each proposal. If required, round to one decimal place. Testing Equipment Diagnostic Software % %
Transcribed Image Text:Average Rate of Return The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals: Amount of investment Useful life Estimated residual value Estimated total income over the useful life Testing Equipment Diagnostic Software $28,000 4 years $40,000 9 years $0 $2,800 $0 $16,200 Determine the expected average rate of retur for each proposal. If required, round to one decimal place. Testing Equipment Diagnostic Software % %
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