Locator-onprogress=false eBook Show Me How Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Tracking Technology Income from Net Cash Income from Net Cash Year Operations Flow Operations Flow 1 $40,000 $125,000 $84,000 $200,000 2 40,000 125,000 64,000 169,000 40,000 125,000 32,000 119,000 4 40,000 125,000 14,000 81,000 UT 40,000 125,000 5,000 56,000 Total $200,000 $625,000 $200,000 $625,000 Each project requires an investment of $400,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 0. 792 0.683 0.636 0.572 0.48 Next Check My Work ems Save and Exit Submit Assignment for Grading 0.0% 3:33 PM 4/25/2022PR 26-1A, PR 26-4A eBook Show Me How 0.747 0.621 0.567 0.497 0.402 1. PR.26.01.ALGO 6 0.705 0.564 0.507 0.432 0.335 2. PR.26.04.ALGO 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: la. Compute the average rate of return for each investment. Average Rate of Return Warehouse Tracking Technology 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. Warehouse Technology Present value of net cash flow total Less amount to be invested Net present value in time. Thus, if only one of the two projects can 2. The warehouse has a net present value as tracking technology cash flows occur be accepted, the would be the more attractive. Next Check My Work Progress: 1/2 items Save and Exit Submit Assignment for Grading Assignment Score: 0.0% 3:33 PM 4/25/2022 81 . F Mostly sunny CE prt sc home end insert delete F10 F11 F12 esc F4 F5 F6 F7 F8 F9 F1 F2 F3 +