Question: Average Rate of Return Method, Net Present Value Method, and Analysis the capital investment committee of Safety Haul Trucking Inc. is considering two investment projects.
Average Rate of Return Method, Net Present Value Method, and Analysis the capital investment committee of Safety Haul Trucking Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows:
Net Present Value Method, and" class="fr-fic fr-dii">Each project requires an investment of $400,000. 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.
a. Compute the average rate of return for investment. If required, round your answer to one decimal place._______________%
b. Compute the Net Present Value for each investment. Use the present value of $1 table present value. If required, use the minus sign to indicate a negative Net Present Value. If required, round to the nearestdollar.
Warehouse Tracking Technology ncome fromNet Cash Operations Income from Operations 90,000 80,000 30,000 Net Cash Flow 170,000 160,000 110,000 80,000 60,000 580,000 Year Flow $116,000 116,000 116,000 116,000 116,000 580,000 9 36,000 36,000 36,000 36,000 36,000 (20,000) 180,000 Total $180.000
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