CH26 PR26-01B, PR-02B

Average rate of return method, net present value method, and analysis for a service company The capital investment committee of Elis Transport and Storage Inc. is considering two investment projects. The estimated operating income and net cash fows from each investment are as follows: Each project requires an investment of $368,000. Straight-line depreciation wil be used, and no residual value is expected. The committee has selected a rate of 15% for purposes of the net present value analysis. Each project requires an investment of $368,000.5 traight-line depreciation will be used, and no residual value is expectedi The committee has selected a fate of 15% for purposes of the net present value analysis. Required: 1a. Compute the average rate of return for each investment, If required, round your answers to one decimal place. 1b. Compute the net present value for each investment. Use the present value of \$1 table above. If requifed, use the minus sign to indicate a negative net present value. If required, round to the nearest dollar. Required: 1a. Compute the average rate of return for each investment. If required, round your answers to one decimal place. 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. If required, round to the nearest dollar. 2. The net present value exceeds the selected rete established for discounted cash flows (15\%), while the does not. Thus, considering only quantitative factors, the investment should be selected. 1a. Compute the average rate of return for each investment, If required, round your answers to one deciesal place. 16. Compute the net present value for each investment, Use the present value of s 1 table above. If required, use the minus sign to indicate a negative net present valoe If required, round to the nearest dollar. 2. The net present value exceeds the selected rate established for discounted cash flows (15\%), while the. does not, Thus, considering only quantitative factors, the investment should be selected