Average Rate of Return

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

	Project A		Project Z
Amount of investment	$88,000			$40,000
Useful life	4 years			7 years
Estimated residual value	0			0
Estimated total income over the useful life	$7,040			$9,100

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

Project A	fill in the blank 1%
Project Z	fill in the blank 2%

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