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he capital investment committee of Ellis Transport and StorageInc. is considering two investment projects. The estimated incomefrom operations and net cash flows from each investment are asfollows:

	Warehouse					Tracking Technology
Year	Income from Operations		Net Cash Flow			Income from Operations		Net Cash Flow
1	$44,000		$137,000			$92,000		$219,000
2	44,000		137,000			70,000		185,000
3	44,000		137,000			35,000		130,000
4	44,000		137,000			15,000		89,000
5	44,000		137,000			8,000		62,000
Total	$220,000		$685,000			$220,000		$685,000

Each project requires an investment of $440,000. Straight-linedepreciation will be used, and no residual value is expected. Thecommittee has selected a rate of 10% for purposes of the netpresent value analysis.

Present Value of $1 at CompoundInterest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	0.890	0.826	0.797	0.756	0.694
3	0.840	0.751	0.712	0.658	0.579
4	0.792	0.683	0.636	0.572	0.482
5	0.747	0.621	0.567	0.497	0.402
6	0.705	0.564	0.507	0.432	0.335
7	0.665	0.513	0.452	0.376	0.279
8	0.627	0.467	0.404	0.327	0.233
9	0.592	0.424	0.361	0.284	0.194
10	0.558	0.386	0.322	0.247	0.162

Required:

1a. Compute the average rate of return for eachinvestment. If required, round your answer to one decimalplace.

	Average Rate of Return
Warehouse	%
Tracking Technology	%

1b. Compute the net present value for eachinvestment. 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	$	$
Less amount to be invested	$	$
Net present value	$	$

2. The warehouse has a   netpresent value as tracking technology cash flowsoccur   in time. Thus, if only one of the twoprojects can be accepted, the   would be the moreattractive.