A)

Average Rate of Return

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

	3D Printer		Truck
Amount of investment	$96,000			$40,000
Useful life	4 years			7 years
Estimated residual value	0			0
Estimated total income over the useful life	$8,640			$12,600

Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place.

3D Printer	fill in the blank 1 %
Truck	fill in the blank 2 %

B)

Cash payback period for a Service Company

Omni Financial Inc. is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $150,000 and each with an 8-year life and expected total net cash flows of $240,000. Location 1 is expected to provide equal annual net cash flows of $30,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1	$59,000		Year 5	$31,000
Year 2	44,000		Year 6	25,000
Year 3	29,000		Year 7	18,000
Year 4	18,000		Year 8	16,000

Determine the cash payback period for both location proposals.

Location 1	12345678 years
Location 2	12345678 years