Present Value of $1 at Compound 1a. Compute the average rate of return for each investment

Average Rate of Return Method, Net 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: 112,000 151,000 112,000 106,000 112,000 112,000 Warehouse Tracking Technology Income from Year Operations 1 2 3 4 5 Total $36,000 36,000 36,000 36,000 36,000 $180,000 Net Cash Flow $112,000 $560,000 Income from Operations $76,000 58,000 29,000 13,000 4,000 $180,000 Net Cash Flow $179,000 73,000 51,000 $560,000 Each project requires an investment of $400,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 1 2 3 4 5 6 7 8 9 10 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.833 694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162