PR 26-1A Average rate of return method, net present value method, OBJ. 2,3 and analysis The capital investment committee of Nature's Portrait Landscaping Company is consider- ing two capital investments. The estimated income from operations and net cash flows from each investment are as follows: Year Front-End Loader Income from Net Cash Operations Flow $25,000 $ 40,000 20,000 35,000 7,000 22,000 3,000 18,000 1,250 16,250 $56,250 $131,250 Greenhouse Fixtures Income from Net Cash Operations Flow $11,250 $ 26,250 11,250 26,250 11,250 26,250 11,250 26,250 11,250 26,250 $56,250 $131,250 Total Each project requires an investment of $75,000. 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. Instructions 1. Compute the following: a. The average rate of return for each investment. Round to one decimal place, b. The net present value for each investment. Use the present value of $1 table appearing in this chapter (Exhibit 2). Round present values to the nearest dollar. 2. Prepare a brief report for the capital investment committee, advising it on the relative merits of the two investments