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 Income from Net Cash Income from Net Cash Year Operations Flow Operations Flow 1 $62,000 $199,000 $130.000 $318.000 62,000 199,000 99,000 269,000 2 62,000 199,000 50,000 109,000 4 62,000 199.000 22.000 129,000 62,000 199,000 9,000 90.000 Total $310.000 $995.000 $310,000 $995,000 2 Each project requires an investment of $520,000. Straight line depreciation wit de ses and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value ana Present Value of $1 at Compound Interest Year 10 129 15% 20% 1 0.943 0.909 0.93 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.712 0.650 0.579 0.680 0.636 0.572 0.42 0.623 0.567 0.402 0.705 0.564 0.507 0.432 0.335 7 0.513 0:452 3.376 0.279 0.622 0.46 0.404 3 5 6 tach project requires an investment of $630,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the ret present value analysis Present Value of $1 at Compound Interest Year 104 15% 20% 12% 0.893 0.909 0.870 0.833 2 0.890 0.826 0.797 0.756 0.360 0.751 0.712 0.579 0.482 4 0.522 5 0.747 0.621 0.56 0.497 0.402 5 0.564 0.50 0.432 0.335 0.705 0.665 7 0.513 0.452 0.279 8 0.404 0.327 0.233 0.592 0.361 0.254 0.247 0.194 0.162 10 0.322 Required in Compute the wenge rate of return for each investment of red, round your answer to one decimale Average Rate of Return Warehouse 7.2 X Trading Technology 3.05 X 1b. Compute the net present value for each Investment. Use the present value of 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 717,395 766,009 Less amount to be tested $520,000 620,000 Netprent value $ 97,395 146,000 0.44 033 0.233 0.44 361 0.24 0194 10 0322 0.16 Required in Compute the average rate of return for each investment. If required, round your answer to one decimal place Average Rate of Return Trading Technology 3.05 X 1 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 717,395 766,009 Les amount to be invested 620,000 620,000 97,395 146,00 2. The warehouse has a smaller ret present les tracking technology cash flow occur earlier time. Thus, only one of the two projects can be accepted, the tracking technology we the more attractive Decome by average investment Th. For the presentator for each year tystashow Stact the amount beste from the compreso there show which inventore more 2. Consider when choose and money