Average rate of return method, net present value method, and analysis for a service company

The capital investment committee of Iguana Inc. Is considering two capital investments. The estimated operating income and net cash flows from each investment are as follows:

$\backslash$table$[[$Year$,\backslash$table$[[$Robotic Assembler$],[$Operating Income$]],\backslash$table$[[$Robotic Assembler$],[$Net Cash Flow$]],\backslash$table$[[$Warehouse$],[$Operating Income$]],\backslash$table$[[$Warehouse$],[$Net Cash Flow$]]],[1,$$$50,600,$$$160,000,$$$106,000,$$$256,000],[2,50,600,160,000,81,000,216,000],[3,50,600,160,000,40,000,152,000],[4,50,600,160,000,18,000,104,000],[5,50,600,160,000,8,000,72,000],[$Total$,$$$253,000,$$$800,000,$$$253,000,$$$800,000],[,,,,]]$

Present Value of $$1$ at Compound Interest

$\backslash$table$[[$Year$,6\%,10\%,12\%,15\%,20\%],[1,0\mathrm{.}943,0\mathrm{.}909,0\mathrm{.}893,0\mathrm{.}870,0\mathrm{.}833],[2,0\mathrm{.}890,0\mathrm{.}826,0\mathrm{.}797,0\mathrm{.}756,0\mathrm{.}694],[3,0\mathrm{.}840,0\mathrm{.}751,0\mathrm{.}712,0\mathrm{.}658,0\mathrm{.}579],[4,0\mathrm{.}792,0\mathrm{.}683,0\mathrm{.}636,0\mathrm{.}572,0\mathrm{.}482],[5,0\mathrm{.}747,0\mathrm{.}621,0\mathrm{.}567,0\mathrm{.}497,0\mathrm{.}402],[6,0\mathrm{.}705,0\mathrm{.}564,0\mathrm{.}507,0\mathrm{.}432,0\mathrm{.}335],[7,0\mathrm{.}665,0\mathrm{.}513,0\mathrm{.}452,0\mathrm{.}376,0\mathrm{.}279],[8,0\mathrm{.}627,0\mathrm{.}467,0\mathrm{.}404,0\mathrm{.}327,0\mathrm{.}233],[9,0\mathrm{.}592,0\mathrm{.}424,0\mathrm{.}361,0\mathrm{.}284,0\mathrm{.}194],[10,0\mathrm{.}558,0\mathrm{.}386,0\mathrm{.}322,0\mathrm{.}247,0\mathrm{.}162]]$ Required:

$1$a$.$ Compute the average rate of return for each investment. If required, round your answer to one decimal place.

Average Rate of Return

Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments.

The robotic assembler has a

inet present value because cash flows occur

in time compared to the warehouse. Thus, if only one of the two projects can be accepted, the

$?$ would be the more attractive.