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

$84,000

$96,000

Useful life

4 years

5 years

Estimated residual value

0

0

Estimated total income over the useful life

$11,760

$26,400

Determine the expected average rate of return for each proposal.

3D Printer%

Truck%