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: Warehouse Year Net Cash Flow $157,000 1 Income from Operations $50,600 50,600 50,600 50,600 50,600 2. Tracking Technology Income from Net Cash Operations Flow $106,000 $251,000 81,000 212,000 40,000 149,000 18,000 102,000 8,000 71,000 $253,000 $785,000 157,000 157,000 157,000 157,000 285,000 3 4 5 Total $253,000 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 10 for purposes of the net present value analysis. Present Value of $1 at Compound Interest 20% 15% 12% 109 Year 6% 0.870 0.833 0.909 0.943 1 0.756 0.694 0.579 Previous 0.893 0.797 0.712 0.826 0.890 2 0.658 0.751 0.840 3 A for Grading 0.792 4 0.636 0.482 0.572 0.683 0.621 5 0.567 0.402 0.497 0.747 0.705 0.507 0.564 0.432 6 0.335 0.279 7 0.665 0.513 0.452 0.376 0.327 0.467 0.404 0.233 8 0.627 0.592 0.424 0.361 0.284 0.194 9 0.162 0.322 0.558 0.247 0.386 10 Required: 1a. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Average Rate of Return Warehouse Tracking Technology 1b. Compute the net present value for each investment. Use the present value of $1 table above. If required, use the minus sign to indicate a negative net present value Warehouse Tracking Technology Present value of net cash flow total in time. Thus, if only one of the two Less amount to be invested Net present value net present value as tracking technology cash flows occur would be the more attractive Previous 2. The warehouse has a projects can be accepted, the Submit Assignment for Grading mal instruct My Work 2 more Check My Work uses remaining