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: Each project requires an investment of $600,000. 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. Required: 1a. Compute the average rate of return for each investment. 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. If required, round to the nearest dollar. 2. The warehouse has a net present value as tracking technology cash flows occur in time. Thus, if only one of the two projects can be accepted, the? would be the more attractive. Feedback Check My Work 1a. Divide the estimated average annual income by the average investment. 1b. For each investment, multiply the present value factor for each year by that year's net cash flow. Subtract the amount to be invested from the total present value of the net cash flow. Which investment offers the more favorable net present value? 2. Consider when cash flows are received and the time value of money