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 income from operations and net cash flows from each investment are as follows: Each project requires an investment of $580,000. Straight-line depreciation will be used, and no residual value is expected. The committee has seiected a rate of 12% for purposes of the net present value analysis. Required: 1a. Compute the average rate of return for each investment, If required, round your answer to one decimal place. Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place. 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. 2. Prepare a brief report for the capital investment committec, advising it on the relative merits of the two investments. The front-end loader has a net present value because the 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. Fuctoack Cheok My Work 1a. Dide the estimated average annual income by the average investment. 1b. For each imestment, muliply the prosent value factor for each year (Exhbat 2) by that year's net cash flow. Subtract tre amount to be invested from the total present value of the net cash flow Which imestment offers the more tavorable net present value? 2 Consider when cash fows are received and the time value of money. Leaming Objoctive 2, Leaming Objective 3