The following data are accumulated by GreenApple Motors Inc. evaluating two competing capital investment proposals: Testing EquipmentDiagnostic SoftwareAmount of investment$44,000 $80,000 Useful life4 years 7 years Estimated residual value$0 $0 Estimated total income over the useful life$4,840 $28,000 Determine the expected average rate of return for each proposal. If required, round to one decimal place.Testing Equipment%Diagnostic Software %

As per cost and management accounting expected average rate of return is used for performance…

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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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The following data are accumulated by GreenApple Motors Inc. evaluating two competing capital investment proposals:

	Testing Equipment	Diagnostic Software
Amount of investment	$44,000		$80,000
Useful life	4 years		7 years
Estimated residual value	$0		$0
Estimated total income over the useful life	$4,840		$28,000

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

Testing Equipment	%
Diagnostic Software	%

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