Average rate of return method, net present value method, and analysis for a service company The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated operating income and net cash flows from each investment are as follows: Year Warehouse Operating Income Warehouse Net Cash Flow Tracking Technology Operating Income Tracking Technology Net Cash Flow 1 $ 61,400 $135,000 $ 34,400 $108,000 2 51,400 125,000 34,400 108,000 3 36,400 1

Average rate of return method, net present value method, and analysis for a service company 1a. Compute the average rate of return for each investment. If required, round your answers to one decimal place. 2. The net present value exceeds the selected rate established for discounted cash flows (15\%), while the does not. Thus, considering only quantitative factors, the investment should be selected