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Average Rate of Return The following data are accumulated by Eco Labs, Inc. in evaluating two competing capital investment proposals: Testing Equipment Vehicle Amount of
Average Rate of Return The following data are accumulated by Eco Labs, Inc. in evaluating two competing capital investment proposals: Testing Equipment Vehicle Amount of investment $44,000 $92,000 Useful life 4 years 5 years Estimated residual value Estimated total income over the useful life $5,720 $26,450 Determine the expected average rate of return for each proposal. If required, round your answers to one decimal place. Testing Equipment 30 X % Vehicle 30 X % dos Chak Work Divide the estimated average annual income by the average investment. Investment cost plus residual value divided by two equal Learning Objective 2
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