1 REVISED)

Ayeage rate of retym methed, net present yalue method, and analysig fon a servief company The capital investment committee of Iguana Inc. Is considering two capital investinents. Thes estirnated operating income and net cash flows from each investment are as followis Each project requires an investment of $150,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. Required 1a. Compute the average rate of retum for each investment. If required, round your answer to one decimal place