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

Year	Distribution Center Expansion Income from Operations	Distribution Center Expansion Net Cash Flows	Internet Tracking Technology Income from Operations	Internet Tracking Technology Net Cash Flows
1	$44,200	$137,000	$93,000	$219,000
2	44,200	137,000	71,000	185,000
3	44,200	137,000	35,000	130,000
4	44,200	137,000	15,000	89,000
5	44,200	137,000	7,000	62,000
Total	$221,000	$685,000	$221,000	$685,000

The Distribution Center Expansion requires an investment of $520,000 while the Internet Tracking Technology requires an investment of $464,000. Straight-line depreciation will be used, and no residual value is expected for either project.

Required:

1. Compute the average rate of return for each investment. Round to one decimal place.

Line Item Description	Average Rate of Return
Distribution Center Expansion	fill in the blank 1%
Internet Tracking Technology	fill in the blank 2%

2. The report should indicate that the fill in the blank 1 of 2

distribution center expansioninternet tracking technology

investment has a higher annual rate of return than the fill in the blank 2 of 2

distribution center expansioninternet tracking technology

investment.