Average Rate of Return

The following data are accumulated by McDermott Motors Inc. evaluating two competing capital investment proposals:

	Testing Equipment		Diagnostic Software
Amount of investment	$60,000		$64,000
Useful life	4 years		9 years
Estimated residual value	$0		$0
Estimated total income over the useful life	$9,600		$33,120

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

Testing Equipment	%
Diagnostic Software	%