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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 | $76,000 | | | $72,000 | |
| Useful life | 4 years | | | 5 years | |
| Estimated residual value | 0 | | | 0 | |
| Estimated total income over the useful life | $6,840 | | | $14,400 | |
Determine the expected average rate of return for each project. Round your answers to one decimal place.
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