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 $44,000 44,000 44,000 44,000 44,000 $220,000 $142,000 142,000 142,000 142,000 142,000 $710,000 $92,000 70,000 35,000 15,000 8,000 $220,000 $227,000 192,000 135,000 92,000 64,000 $710,000 4 Tota Each project requires an investment of $440,000. 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 696 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 2090 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 Year 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 2 4 6 7 8 9 10 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