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 $28,000 $88,000 Useful life 4 years 9 years Estimated residual value 0 Estimated total income over the useful life $2,240 $25,740 Determine the expected average rate of return for each project. Round your answers to one decimal place Project A Project Z

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
$28,000
$88,000
Useful life
4 years
9 years
Estimated residual value
0
Estimated total income over the useful life
$2,240
$25,740
Determine the expected average rate of return for each project. Round your answers to one decimal place
Project A
Project Z
Transcribed Image Text: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 $28,000 $88,000 Useful life 4 years 9 years Estimated residual value 0 Estimated total income over the useful life $2,240 $25,740 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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