Problem 4 Average rate of return The following data are accumulated by Bio Metrics Inc. in evaluating two competing capital investment proposals Testing Equipment Vehicle $32,000 8 years Amount of investment Useful life Estimated residual value Estimated total income over the useful life 104,000 6 years $18,720 15,360 Determine the expected average rate of return for each proposal. If required, round to the nearest whole percent. Testing Equipment Vehicle Problem 5 Cash Payback Period Nations Trust is evaluating two capital investment proposals for a drive-up ATM kiosk, each requiring an investment of $380,000 and each with an eight-year life and expected total net cash flows of $608,000. Location 1 is expected to provide equal annual net cash flows of $76,000, and Location 2 is expected to have the following unequal annual net cash flows Year 1 $120,000 Year 2 90,000 Year 3 90,000 Year 480,000 Year 5 $57,000 Year 6 57,000 Year 7 57,000 Year 8 57,000 Determine the cash payback period for both location proposals. Location 1 Location2