The 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%

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

Answered: The following data are accumulated by…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter11: The Cost Of Capital

Section: Chapter Questions

Problem 19PROB

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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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