AverageRate pf Return Method Net Pment Value Method, and Analyses The capital in

Question

AverageRate pf Return Method Net Pment Value Method, and Analyses The capital investment commttee of Hampton Landscaping Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follow: Each project requires an investment of $64,000. Straight-line depreciation will be used, and no residual va*ue is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. Compute the average rate of return for each investment. If required, round your answer to one decimal place. Compute the net present value for each investment. Use the present value of $1 table present above. If required, round to the nearest dollar. Present value of net cash flow total: Less amount to be invested: Net present value:

Explanation / Answer

1a) 22.5%

1b) present value of net cash flow total :

greenhouse = $100000* 0.567=$ 56700

skid loader= $56700

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