The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated operating income and net cash flows from cach Investment are as follows: Front-End Loader Greenhouse Operating Income Net Cash Flow Operating Income Net Cash Flow Year 1 2 $68,200 68,200 68,200 68,200 68,200 $143,000 109,000 55,000 $217,000 217,000 217,000 217,000 217,000 3 $347,000 293,000 205,000 141,000 98,000 4 5 24,000 10,000 $341,000 $361,000 Total $1,085,000 $1,085,000 Each project requires an investment of 5620,000. 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 69 10% 129 15% 20% 1 0.943 0.900 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.340 0.75 0.712 0.658 0.579 4 0.792 0,683 0.636 0.572 0.432 5 0.747 0.021 0.562 0.497 0.402 41 RICCI 5 0.747 0.62 0.567 0.497 0.402 6 0.705 0.564 0.432 0.335 0,507 0.452 7 0.376 0.279 0.665 0.627 0.513 0.467 8 0.404 0.327 0.223 9 0.592 0.361 0.284 0.194 0.424 0.386 10 0.558 0.322 0.247 0.162 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 1b. Compute the net present value for each investment. Use the present value of 51 table above. If required, round to the nearest dollar. It required, use 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 109,083 107,236 2. Prepare a brief report for the capital investment committee advising it on the relative ments of the two investment intime compared to the greenhouse. Thus, if only one of the two The front-end loader has a smaller net present value because cash flows occur later projects can be accepted, the greenhouse would be the more attractive