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Average Aate 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 fors from each investment are as foliows: Each project requires an investment of $380,000, straight-line depreciation will be used, and no residual value is expected. The committee hos selected a rate of to\%, for purposes of the net present value analysis. 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal piace. 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, round to the nearest dollar. If required, use the sign to indicate a negative net present value. 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, round to the nearest doltar. If required, use the minus sign to indicate a negative net present value. 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments. The front-end londer has a net present value because cash flows occur In time compared to the greenhouse. Thus, if caly ane of the two projects can be accepted, the would be the more attractive. Fendaka * Crack My Were ta. Divide the estimated averege annual income by the average investment. 16. For each invesiment muliply the present value factor for each year (Exhiti 2) by that year's net cash flaw. Suberact the amount to be insested trom ine totar frosont value of the nat cash fow. Which imvestinent oflers the more favorable net present value? 2 Consider when cosh flows are received and the time value of money