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
Year	Income from Operations		Net Cash Flow			Income from Operations		Net Cash Flow
1	$27,000		$86,000			$57,000		$138,000
2	27,000		86,000			43,000		116,000
3	27,000		86,000			22,000		82,000
4	27,000		86,000			9,000		56,000
5	27,000		86,000			4,000		38,000
Total	$135,000		$430,000			$135,000		$430,000

Each project requires an investment of $360,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 15% for purposes of the net present value analysis.

Present Value of $1 at Compound Interest
Year	6%	10%	12%	15%	20%
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	0.558	0.386	0.322	0.247	0.162

Required:

Required: 1a. Compute the average rate of return for each Investment. if required, round your answer to one declmal place Average Rate of Return Front-End Loader Greenhouse lb. Compute the net present value for each investment. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value 9n Front-End Loader Greenhouse Pre$ent valu 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 the net present value because ? cash flows occur earlier in time compared to the greenhouse. Thus, if only one of the two projects can be accepted would be the more attractive