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 Income from operations and net cash flows from each investment are as follows: Front-End Loader Greenhouse Income from Net Cash Income from Net Cash Year Operations Flow Operations Flow 1 $65,100 $196,000 $137,000 $314,000 2 65,100 196,000 104,000 265,000 3 65,100 196,000 52,000 186,000 65,100 196,000 23,000 127,000 5 65,100 196,000 9,500 88,000 Total $325,500 $980,000 $325,500 $980,000 4 Each project requires an investment of $620,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the niet present value analysis. Each project requires an investment of $620,000. 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 12% 15% 20% 6% 10% 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 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 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 0.386 0.247 0.558 0.322 0.162 Required: 1aCompute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return Cut 0.592 0.424 0.361 10 0.558 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 Front-End Loader % Greenhouse 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. 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, advising it on the relative merits of the two investments, The front-end loader has a net present value because cash flows occur in time compared to the greenhouse. Thus, if only one of the two projects can be accepted, the would be the more attractive