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 $85,000 $208,000 64,000 176,000 32,000 124,000 4,000 85,000 6,500 57,000 Total $201,500 $650,000 $201,500 $650,000 1 $40,300 $130,000 2 40,300 130,000 3 40,300 130,000 40,300 130,000 40,300 130,000 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 6% 10% 12% 15% 20% 10.943 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 0.558 0.386 0.322 0.247 0.162 Required: 1a. Compute the average rate of return for each investment. f equired, round your answer to one decimal place. Average Rate of Return Front-End Loader % If required, use 1b. Compute the net present value for each Investment. Use he present velue of $1 table above 1b. Compute the net present value for each investment, Use the present value of $1 table 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