2. The options are for drop down menu 1 are larger or smaller. The options for dropdown menu 2 are earlier, more evenly, or later. The options for dropdown menu 3 are tracking technology or warehouse.

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: Warehouse Tracking Technology Net Cash Year Income from Operations Net Cash Flow Income from Operations Flow 1 $41,400 $130,000 $87,000 $208,000 2 41,400 130,000 66,000 176,000 3 41,400 130,000 33,000 124,000 4 41,400 130,000 14,000 85,000 5 41,400 130,000 7,000 57,000 Total $207,000 $650,000 $207,000 $650,000 Each project requires an investment of $460,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return Warehouse % Tracking Technology % 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 in 2. The warehouse has a net present value as tracking technology cash flows occur time. Thus, if only one of the two projects can be accepted, the would be the more attractive