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 %

Principles of Accounting Volume 2
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Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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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 $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 %
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