Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Avenge Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellen Transport and Storage Inc. is considering two investment

image text in transcribed
image text in transcribed
Avenge Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellen 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 Income from Net Cash Operations Flow Year 1 2 $57,200 57,200 57,200 57,200 37,200 $188,000 188,000 188,000 188.000 Tracking Technology Income from Net Cash Operations Flow $120,000 $300,000 92,000 254,000 46,000 179,000 20,000 122,000 3,000 84,000 $280,000 $940,000 3 3 168,000 5940,000 Total $286.000 of 15 for Each project requires a weatment of 5520,000 Stotine depreciation will be well, and no rendont vitae is expected. The committee hoste purposes of the net procent value analys Present Value of Si at Compound Interest Year 6. TO 12 15 2016 1 0.43 0,900 0.893 0.70 0.833 0.000 0.826 0.92 0.756 0.600 0.840 0.751 0.712 0.658 0.570 0.792 0.663 0.636 0.572 0.482 4 3 0.80 0.212 0.658 0.579 0.751 0.683 4 0.792 0.636 0572 0.482 5 0.742 0,621 0.567 0.497 0.402 6 0.564 0.507 0.632 0.705 0.665 0.622 0.335 0.279 7 0.513 0.452 0.376 8 0.467 0.404 0.233 0.327 0.284 9 0.592 0.424 0.194 0.361 0.322 10 0.558 0.386 0.247 0.162 Requiredi 1a. Compute the average rate of return for each investment. It required, round your answer to one decimal place Average Rate of Return Warehouse Tracking Technology 1b. Compute the net present value for each investment. The the present value of 51 table bove. It required, use the minus sige tor Indicate a nepative net present value Warehouse Tracking Technology Present value of net cash flow total Les amount to be invested 520,000 520, 01 / Net present value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

26th edition

128574361X, 978-1305446052, 1305446054, 978-1285743615

Students also viewed these Accounting questions