The capital investment committee of Arches Landscaping Company is considering two capital Investments. The estimated operating income and net cash flow each investment are as follows: Front-End Loader Greenhouse Operating Income Net Cash Flow Operating Income Net Cash Flow Year $65,100 $197,000 $137,000 $315,000 2 65,100 197,000 266,000 3 197,000 104,000 52,000 23,000 187,000 65,100 65,100 65,100 4 197,000 128,000 5 197,000 9,500 89,000 Total $325,500 $985,000 $325,500 $985,000 Each project requires an investment of $620,000, Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate 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 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 0.705 0.564 0.507 0.432 0.335 7. 0.665 0.513 0.452 0.376 0.279 0.233 0.627 0.467 0.404 0.327 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 0.990 0.826 0.797 0.75G 0.840 0.712 0.658 0.579 4 0.792 0.572 5 0.747 0.567 6 7 0.665 0.513 8 9 0.284 0.194 10 0.322 0.162 0.694 0.751 0.683 0.636 0.482 0.623 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.452 0.376 0.279 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.558 0.386 0.247 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 $1 table above. It 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 2. Prepare a brief report for the capital investment committee advising it on the relative merits of the two investments, in time compared to the greenhouse. Thus, If only The front-end onder has net present value because cash flows occur would be the more attractive one of the two projects can be accepted, the The capital investment committee of Arches Landscaping Company is considering two capital Investments. The estimated operating income and net cash flow each investment are as follows: Front-End Loader Greenhouse Operating Income Net Cash Flow Operating Income Net Cash Flow Year $65,100 $197,000 $137,000 $315,000 2 65,100 197,000 266,000 3 197,000 104,000 52,000 23,000 187,000 65,100 65,100 65,100 4 197,000 128,000 5 197,000 9,500 89,000 Total $325,500 $985,000 $325,500 $985,000 Each project requires an investment of $620,000, Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate 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 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 0.705 0.564 0.507 0.432 0.335 7. 0.665 0.513 0.452 0.376 0.279 0.233 0.627 0.467 0.404 0.327 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 0.990 0.826 0.797 0.75G 0.840 0.712 0.658 0.579 4 0.792 0.572 5 0.747 0.567 6 7 0.665 0.513 8 9 0.284 0.194 10 0.322 0.162 0.694 0.751 0.683 0.636 0.482 0.623 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.452 0.376 0.279 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.558 0.386 0.247 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 $1 table above. It 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 2. Prepare a brief report for the capital investment committee advising it on the relative merits of the two investments, in time compared to the greenhouse. Thus, If only The front-end onder has net present value because cash flows occur would be the more attractive one of the two projects can be accepted, the