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 Income from Net Cash Income from Net Cash Flow Flow Year Operations Operations $60,000 $197,000 $126,000 $315,000 60,000 197,000 96,000 266,000 60,000 197,000 48,000 187,000 60,000 197,000 21,000 128,000 4 60,000 197,000 9,000 89,000 $300,000 $985,000 Total $300,000 $985,000 Each project requires an investment of $600,000. 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 10% 690 12% 15% 20% Year 0.943 0.909 0.893 0.870 0.833 0.694 0.797 2 0.890 0.826 0.756 0.579 0.840 0.751 0.712 0.658 0.636 0.572 0.482 4 0.792 0.683 0.621 0.567 0.747 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.404 0.233 8 0.467 0.327 0.194 0.592 0.424 0.361 0.284 0.558 0.386 0.322 0.247 0.162 10 Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place Average Rate of Return 21 | X % Front-End Loader 21 | X % Greenhouse 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 Front-End Loader Greenhouse 454,849 X Present value of net cash flow Amount to be invested 35,849 X Net present value