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: Front-End Loader Greenhouse Operating Net Cash Operating Net Cash Year Income Flow Income Flow 1 $50,400 $160,000 $106,000 $256,000 2 50,400 160,000 81,000 216,000 3 50,400 160,000 40,000 152,000 4 50,400 160,000 18,000 104,000 5 50,400 160,000 7,000 72,000 Total $252,000 $800,000 $252,000 $800,000