The capital investment committee of Cross Continent Trucking Inc. is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows:

Warehouse Tracking TechnologyYearIncome from OperationsNet Cash Flow Income from OperationsNet Cash Flow1$47,500 $145,000 $100,000 $232,000 247,500 145,000 76,000 196,000 347,500 145,000 38,000 138,000 447,500 145,000 17,000 94,000 547,500 145,000 6,500 65,000 Total$237,500 $725,000 $237,500 $725,000

Each project requires an investment of $500,000. 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 InterestYear6%10%12%15%20%10.9430.9090.8930.8700.83320.8900.8260.7970.7560.69430.8400.7510.7120.6580.57940.7920.6830.6360.5720.48250.7470.6210.5670.4970.40260.7050.5640.5070.4320.33570.6650.5130.4520.3760.27980.6270.4670.4040.3270.23390.5920.4240.3610.2840.194100.5580.3860.3220.2470.162

1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place.

Average Rate of Return

Warehouse

%

Tracking Technology

%

1b. Compute the net present value for each investment. Use the present value of $1 table present above.

	Warehouse	Tracking Technology
Present value of net cash flow total:	$	$
Less amount to be invested:	$	$
Net present value:	$	$