Average Rate of Return Method, Net Present Value Method, and Analysis 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 Income Net Cash Income Net Cash Year from from Flow Flow Operations Operations $46,800 $150,000 $98,000 $240,000 16,800 150,000 75,000 203,000 46,800 150,000 37,000 143,000 46,800 150,000 16,000 98,000 46,800 150,000 8,000 66,000 Total $234,000 $750,000 $234,000 $750,000 Each project requires an investment of $520,000. 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% 1 0.943 0.909 0.993 0.870 0.833 2 0.890 0.B26 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.536 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.375 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.21 0.191 10 0.559 0.396 0.322 0.247 0.162 Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal plece. Average Rate of Return Warehouse Tracking Technology 1b. 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 Tracking Warehouse Technology Present value of net cash flow potal Less amount to be investeds Net present value 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