Business

AccountingQ&A LibraryThe following data are accumulated by Watershed Inc. in evaluating two competing capital investment proposals: Project AProject ZAmount of investment$64,000 $84,000 Useful life4 years 9 years Estimated residual value0 0 Estimated total income over the useful life$8,960 $43,470 Determine the expected average rate of return for each project. Round your answers to one decimal place.Project A%Project Z%Question

Asked Dec 6, 2019

82 views

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

Project A |
Project Z |
||||

Amount of investment | $64,000 | $84,000 | |||

Useful life | 4 years | 9 years | |||

Estimated residual value | 0 | 0 | |||

Estimated total income over the useful life | $8,960 | $43,470 |

Determine the expected average rate of return for each project. Round your answers to one decimal place.

Project A | % |

Project Z | % |

Step 1

Hence, the annual net income for project A is $2,240. It is obtained by dividing total net income over the useful life by useful life.

Step 2

Hence, the average investment for project A is $32,000. It is obtained by dividing the sum of amount of investment and residual value by 2.

Step 3

Hence, the average rate of return for project A is 7%. It is obtain...

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: The following table is for the present value of $1 at compound interest. Year 6% 10% 12% ...

A: Calculate the present value of cash flows.

Q: Sally hires a maid to work in her home for $1,030 per month. The maid is 25 years old and not relate...

A: a. Compute the amount of social security tax.

Q: Describe a minimum of three ways Accounting Iinformation System can help minimize or eliminate inacc...

A: Following are the three ways that helps to minimize and eliminate inaccurate time and attendance dat...

Q: Moreno Manufacturing Corporation was started with the issuance of common stock for $55,000. It purch...

A: Record the preceding events and the closing entry for over- or under applied manufacturing overhead ...

Q: The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of...

A: Financial statements: Financial statements refer to those statements, which are prepared by the Comp...

Q: Just answer section D please.

A: The cost of goods sold (COGS) is $6,100, which is the difference of the cost of goods manufactured a...

Q: Analyze Valley Hospital's admissions time variance Valley Hospital began using standards to evaluate...

A: “Hey, since there are multiple questions posted, we will answer first three question. If you want an...

Q: Generalized Statement Instructions Instructions Multiple-Step Income Statement Use the following inf...

A: Multi-step income statement: The income statement represented in multi-steps with several subtotals,...

Q: The following ratios have been computed for Pina Colada Company for 2022. Profit margin ratio 2...

A: As per authoring guidelines first three parts of the question are answered.