The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows:

Warehouse Tracking Technology

Year Income from

Operations Net Cash

Flow Income from

Operations Net Cash

Flow

$1$ $$44,000$ $$134,000$ $$92,000$ $$214,000$

$244,000134,00070,000181,000$

$344,000134,00035,000127,000$

$444,000134,00015,00087,000$

$544,000134,0008,00061,000$

Total $$220,000$ $$670,000$ $$220,000$ $$670,000$

Each project requires an investment of $$440,000.$ Straight$-$line depreciation will be used, and no residual value is expected. The committee has selected a rate of $10\%$ for purposes of the net present value analysis.

Present Value of $$1$ at Compound Interest

Year $6\%10\%12\%15\%20\%$

$10\mathrm{.}9430\mathrm{.}9090\mathrm{.}8930\mathrm{.}8700\mathrm{.}833$

$20\mathrm{.}8900\mathrm{.}8260\mathrm{.}7970\mathrm{.}7560\mathrm{.}694$

$30\mathrm{.}8400\mathrm{.}7510\mathrm{.}7120\mathrm{.}6580\mathrm{.}579$

$40\mathrm{.}7920\mathrm{.}6830\mathrm{.}6360\mathrm{.}5720\mathrm{.}482$

$50\mathrm{.}7470\mathrm{.}6210\mathrm{.}5670\mathrm{.}4970\mathrm{.}402$

$60\mathrm{.}7050\mathrm{.}5640\mathrm{.}5070\mathrm{.}4320\mathrm{.}335$

$70\mathrm{.}6650\mathrm{.}5130\mathrm{.}4520\mathrm{.}3760\mathrm{.}279$

$80\mathrm{.}6270\mathrm{.}4670\mathrm{.}4040\mathrm{.}3270\mathrm{.}233$

$90\mathrm{.}5920\mathrm{.}4240\mathrm{.}3610\mathrm{.}2840\mathrm{.}194$

$100\mathrm{.}5580\mathrm{.}3860\mathrm{.}3220\mathrm{.}2470\mathrm{.}162$

Required:

$1$a$.$ Compute the average rate of return for each investment.

Average Rate of Return

Warehouse fill in the blank $1$

$\%$

Tracking Technology fill in the blank $2$

$\%$

$1$b$.$ 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. If required, round to the nearest dollar.

Warehouse Tracking Technology

Present value of net cash flow total $fill in the blank $3$

$fill in the blank $4$

Less amount to be invested $fill in the blank $5$

$fill in the blank $6$

Net present value $fill in the blank $7$

$fill in the blank $8$

$2.$ The warehouse has a

net present value as tracking technology cash flows occur

in time. Thus, if only one of the two projects can be accepted, the

would be the more attractive