1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place

Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: $68,200 213,000 213,000 213,000 213,000 Wa rehouse Tracking Technology Year 2 Total Income from Operations 68,200 68,200 68,200 68,200 $341,000 Net Cash Flow $213,000 Income from Operations $143,000 109,000 55,000 24,000 10,000 $341,000 Net Cash Flow $341,000 288,000 202,000 138,000 96,000 Each project requires an investment of $620,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Yea r 2 3 5 6 8 9 10 Required: 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 Ia. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Warehouse Tracking Technology Average Rate of Return 18.0 x % 18.0 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value. Warehouse Tracking Technology Present value of net cash flow total Less amount to be invested Net present value 2. The warehouse has a net present value as tracking technology cash flows occur V in time. Thus, if only one of the two projects can be accepted, the tiCkinq-tChii6i69. V would be the more attractive.