Average Rate of Return Method, Net Present Value Method, and Analysis for a service company The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated operating income and net cash flows from each investment are as follows: Net Cash Front-End Leader Net Cash Flow $100,000 10.000 190,000 180,000 180,000 243,000 117,000 500 Each project requires an investment of $540,000. 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. Year 6% 10% 12% 15% 4 5 6 7 3 0 .792 0.63 0.747 0.621 0.705 0.564 0.665 0.53 0.627 0.467 0 5920434 0 .558 0.386 0.636 0.572 0.567 0.497 0.07 0.432 0.452 0.376 0.4040.327 035 0.284 0.322 0.247 0.462 0.402 0335 0.279 02 094 0.162 9 10 Required: la. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return Front-End Loader Greenhouse 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Front-End Loader Greenhou Present value of net cash low Amount to be invested Net present value 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments. The front-end loader has a net present value because cash flows occur in time compared to the greenhouse. Thus, if only one of the two projects can be accepted, the would be the more attractive