Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project Z Amount of investment $60,000 $56,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $9,000 $25,200 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A % Project Z %
Average Rate of Return The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project A Project Z Amount of investment $60,000 $56,000 Useful life 4 years 9 years Estimated residual value 0 0 Estimated total income over the useful life $9,000 $25,200 Determine the expected average rate of return for each project. Round your answers to one decimal place. Project A % Project Z %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals:
| Project A | Project Z | ||||
| Amount of investment | $60,000 | $56,000 | |||
| Useful life | 4 years | 9 years | |||
| Estimated residual value | 0 | 0 | |||
| Estimated total income over the useful life | $9,000 | $25,200 |
Determine the expected average rate of return for each project. Round your answers to one decimal place.
| Project A | % |
| Project Z | % |
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