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Average fate 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 rows from each Investment are as follows: Front-End Loader Greenhouse Operating Net Cash Operating Net Cash Year Income Plow Income Plow 1 563,800 $195,000 $134,000 s12.000 63,800 195,000 102,000 263,000 3 63,800 195,000 51,000 185,000 4 63,800 195,000 22,000 127,000 5 63,800 195,000 10,000 1,000 Total $319,000 $975,000 $319,000 $975,000 Each project requires an investment of 580,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10 tor purposes of the net present value analysis, Present Value of 51 at Compound Interest Year 69 104 129 15% 20% 1 0,943 0.909 0.893 0.870 0.833 2 0.890 0.797 0.756 0.694 0.626 0.751 2 0.840 0.658 0.579 0.712 0.636 4 0.792 0.482 0.572 0.497 5 0,747 0.567 0.402 0.683 0.621 0.564 0.513 6 0.705 0.507 0.432 0.335 7 0.665 0,452 0.376 0.279 Check My Work more Check My Work uses remaining LGO Year LGO 1 0.000 2 _00 3 GO 4 Present Value of $1 at Compound Interest 69 IO4 20W 0.94 0.895 0.870 0.833 0.800 0.126 0.797 0.756 0.694 0.640 0.751 0.712 3.570 0.792 0.663 0.66 0.572 0.482 0.747 0.623 0.567 0.497 0.402 0.705 0.564 0507 0432 8.335 0.665 0.513 0.452 0.376 0.229 0.467 0.464 0.327 0.233 0.592 0.424 0.361 0.2014 0.194 0.350 0.322 0.162 5 GO 5 LGO 2 LGO 9 10 Required: la compute the average rate of return for each investment. It required, round your answer to one decimal place. Average Rate of Return Front-End Loader Greenhouse 1b. Compute the net present value for each investment Use the present value of $1 table bove. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value Front-End Loader Greenhouse Present value of net cash flow Amount to be invested Net present value Previous Next Check My Work 3 ore Check My Work uses remaining Save and Sum Assignment for Grading All work saved 4 0.792 0.633 0,621 0.636 0.567 0.572 0.497 5 0.747 0.402 0.335 0 0.705 0.564 0.432 0.665 0.62% 0.592 0.279 0.507 0.452 0.004 0.513 0.467 0.376 0327 0.233 0.196 02424 0.264 0.361 0.322 10 0.306 0.247 0.162 Required: ia. Compute the average rate of return for each investire utred, round your answer to one decimal place Average Rate of Return Front-End der Greenhouse 1b. Compute the net present value for each investment. Use the presentation of state above. If required, round to the nearest dollar. It required, use theme in to indicate a negative net present value Greenhouse Front-End Loader Present value of net cash flow Amount to be invested Net present value 2. Prepare a brief report for the capital investment committee, advising it on the relativements of the two investments The front-end loader has a net present value because cash rows occur in time compared to the greenhouse. Thus, only one of the two projects can be accepted, the would be the more attractive Previous Next) Check My Work mor Check My Work uses remaining Save and Exit Submit Assignment for Grading All work saved

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