Determine the expected average rate of return

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Average Rate of Return

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

Project A Project Z

Amount of investment $96,000   $84,000

Useful life 4 years   5 years

Estimated residual value 0   0 

Estimated total income over the useful life $11,520   $19,950 

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

Project A _________%

Project Z __________ %

Reference no: EM132418456

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