Chapter 26 Complex Homework eBook Show Me How Average Rate of Raturn Method, feet Present Value Method, and Analysis The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Tracking Technology Warehouse Income from Year Operations 1 $50,600 Net Cash Flow $162,000 Income from Net Cash Operations Flow $106,000 $259,000 2 50,600 162,000 $1,000 219,000 3 50,600 162,000 40,000 154,000 4 50,000 162,000 10,000 105,000 5 Total 50,400 $253,000 162,000 $910,000 8,000 $253,000 73,000 $810,000 Each project requires an investment of $460,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 4 0.943 0.909 0.893 0.870 0.833 2 0.890 0.026 0.797 0.756 0.694 0.040 0.751 0.712 0658 0.579