average rate of return method net present value method and analysis I rate very quickly thank you so much in advance
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: Year 1 2 Warehouse Income from Net Cash Operations Flow $38.000 $117.000 38,000 117,000 38.000 117,000 38,000 117,000 38,000 117,000 $190,000 $585,000 Tracking Technology Income from Net Cash Operations Flow $80,000 $187,000 61,000 158,000 30,000 111,000 13,000 76,000 6,000 53,000 $190,000 $585,000 3 4 5 Total Each project requires an investment of $380,000. 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 69 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 10 Check My Virk 2 mor Check My Woman B 9 26-3 Exercises & Problems 3 0.840 0.751 0.712 0.579 0.6SB 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.326 0.229 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.194 10 0.550 0.306 0.322 0.247 0.162 Required: 1a. Compute the average rate of retum for each investment. If required, round your answer to one decimal place Average rate of Return Warehouse Tracing Technology 1b. Compute the net present value for each investment. Use the present Value of St 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 Les amount to be investod Net present value 2. The warehouse has a net present value as trading technology cash flows occur in time. Thus, if only one Check My Work 2 more Check My Vior termining 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 0.550 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 % 11. 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 tota Less amount to be invested Net present value 2. The warehouse has a of the two projects can be accepted, the net present value as tracking technology cash flows occur would be the more attractive in time. Thus, if only one Check My Work 2 more Check My Work uses remaining Previous
