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Determine the expected average rate of return

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

Project A

Project Z

Amount of investment

$55,000

$50,000

Useful life

12 years

15 years

Estimated residual value

$5,000

$6,000

Estimated total income over the useful life

$57,600

$63,000

Required - Determine the expected average rate of return for each project.

Reference no: EM132717888

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