Average Rate of Return Method, Net Present Value Method, and Analysis for a service company The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated operating Income and net cash flows from each investment are as follows: Front-End Loader Operating Income Year Net Cash Flow Greenhouse Operating Net Cash Income Flow 1 2 $130,000 99,000 50,000 3 $62,000 62,000 62,000 62,000 62,000 $310,000 $200,000 200,000 200,000 200,000 200,000 51,000,000 4 $320,000 270,000 190,000 130,000 90,000 ,000,000 22,000 5 9,000 Total $310,000 Each project requires on investment of 5620,000. Straight-line depreciation will be used, and no residual value is expected. The committee has seriected a ratet of 12% for purposes of the net present value analysis Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 0.694 2 0,890 0.826 0:797 0.756 3 0.840 0.751 02212 0.653 0.579 0.792 0.683 0.636 0.522 0.482 5 0.747 0.567 0.497 6 0.705 0.507 0.621 0.564 0.513 0.467 0.402 0:335 0.432 7 0.665 0.452 0.376 0.279 8 0.404 0.627 0.592 0.322 0.233 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.242 0.162 Required: la. Compute the average rate of return for each investment. If required, round your answer to one decimal place Average Rate of Return Front-End Loader Greenhouse 1b. Compute the net present value for each investment. Use the present value of 51 table above. If required, round to the nearest dollar It required use the minus sign to indicate a negative net present value Front-End Loader Greenhouse Present Value of net cash flow Amount to be invested Net present value 2. Prepare a brief report for the capital investment committee, odvising it on the relativement of the two vestments 2. Prepare a brief report for the capital investment committee, advising it on the relativements of the two investments The front-end loader hos net present value because cash flows occur Thus, if only one of the two projects can be accepted, the would be the more attractive in time compared to the