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

Each project requires an investment of $480,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 15% for purposes of the net present value analysis.Instructions1. Compute the following:(a) The average rate of return for each investment. Round to one decimal place.(b) The net present value for each investment. Use the present value of $1 table appearing in this chapter.2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two projects.

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Warehouse Tracking Technology Income from Operations Income from Net Cash Net Cash Year Flow $138,000 138,000 138,000 138,000 Operations $ 42,000 42,000 42,000 42,000 42,000 Flow $ 89,000 $185,000 165,000 130,000 110,000 100,000 2 3 69,000 34,000 14,000 4,000 138,000 $690,000 Total $690,000 $210,000 $210,000