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 Year Income from Operations Flow $36,000 36,000 36,000 36,000 36,000 $180,000 Tracking Technology Income from Net Cash Operations $76,000 $174,000 58,000 147,000 29,000 104,000 13,000 Net Cash Flow $209,000 109,000 109,000 109,000 109,000 $545,000 71,000 4,00049,000 Total $180,000 $ 545,000 Each project requires an investment of 400,000 Straight-line depreciation will be used, and residual value is expected. The committee selected a rate of 10% for purposes of the net present value analysis

Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ells 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 Income from Net Cash Year Income from Net Cash Operations Flow Operations Flow $36,000 $109,000 $76,000 $174,000 2 36,000 109,000 58,000 147,000 3 36,000 109,000 29,000 104,000 4 36,000 109,000 13,000 71,000 5 36,000 109,000 4,000 49,000 Total $180,000 $545,000 $180,000 $545,000 Each project requires an investment of $400,000. 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 Year 6% 10 12% 15% 2016 1 0.943 0.909 0.870 0.833 0.893 0.797 2 0.890 0.826 0.694 0.756 0.658 0.751 0.712 0.579 0.840 0.792 0.683 0.636 0.482 5 0.621 0.567 0.747 0.705 0.665 0.572 0.497 0.432 0.376 0.402 0.335 0.564 0.507 0.452 7 0.513 0.229 Check My Work 2 more Check My Works remaining Previous All work saved Save and Submit Assignment for Grading MacBook Al $ % 5 & 7 3 4 8 9 E R. T Y U O F G K. . eBook Show Me How Calculator 2 0.756 0.694 0.890 0.840 0.826 0.751 0.797 0.712 3 0.658 0.579 4 0.792 0.572 0.482 5 0.497 0.636 0.567 0.507 0.747 0.705 0.402 0.683 0.621 0.564 0.513 6 0.432 0.335 7 0.665 0.452 0.376 0.279 0.627 0.467 0.327 0.233 0.404 0.361 9 0.592 0.424 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: ia. 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. Use the present value of $1 table above. If required, use the mission 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 projects can be accepted, the net present value as tracking technology cash flows occur would be the more attractive in Thonone of the Oreck My Work 2 mor Check My Works remaining All work saved Sub Anment for Grading MacBook Air % 5 & 7 6 8 9 0 W R. T Y U O P