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verage 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 | $48,000 | | $92,000 | |
| Useful life | 4 years | | 5 years | |
| Estimated residual value | $0 | | $0 | |
| Estimated total income over the useful life | $6,720 | | $27,600 | |
Determine the expected average rate of return for each proposal. If required, round to one decimal place.
| Testing Equipment | % |
| Diagnostic Software | % |
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