1a | Average rate of return = average income / investment | Warehouse | Tracking Technology |
Average income (325500/5) | 65100 | 65100 | |
Investment | 620000 | 620000 | |
Average rate of return = average income / investment | 21% | 21% | |
(65100/((620000+0)/2) | |||
1b | Warehouse | Tracking Technology | |
Present value of net cash flow total | 773160 | 817149 | |
Less: amount to be invested | 620000 | 620000 | |
Net present value | 153160 | 197149 | |
Note: | |||
Warehouse | |||
Net cash flow | Pv @10% | Present value | |
204000 | 0.909 | 185436 | |
204000 | 0.826 | 168504 | |
204000 | 0.751 | 153204 | |
204000 | 0.683 | 139332 | |
204000 | 0.621 | 126684 | |
1020000 | 773160 | ||
Tracking Technology | |||
Net cash flow | Pv @10% | Present value | |
326000 | 0.909 | 296334 | |
275000 | 0.826 | 227150 | |
194000 | 0.751 | 145694 | |
133000 | 0.683 | 90839 | |
92000 | 0.621 | 57132 | |
1020000 | 817149 | ||
2 | The Warehouse has a lower net present value as tracking technology cash flow occur as earlier in time. | ||
Thus, if only one of the two projects can be accepted, the Tracking technology would be more attractive. |
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of...
average rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Cross Continent Trucking Inc. is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Tracking Technology Income from Net Cash Income from Year Net Cash Operations Flow Operations Flow $44,000 $143,000 $92,000 $229,000 44,000 143,000 70,000 193,000 44,000 143,000 35,000 136,000 44,000 143,000 15,000 93,000 44,000 143,000 8,000 64,000 Total $220.000 $715,000 $220.000...
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: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow $53,200 $167,000 $267,000 53,200 167,000 225,000 $112,000 85,000 43,000 19,000 53,200 167,000 159,000 53,200 167,000 109,000 53,200 167,000 7,000 75,000 Total $266,000 $835,000...
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: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $40,000 $130,000 $84,000 $208,000 2 40,000 130,000 64,000 176,000 3 40,000 130,000 32,000 124,000 4 40,000 130,000 14,000 85,000 5 40,000 130,000...
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: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow $40,000 40,000 40,000 40,000 40,000 $200,000 $128,000 128,000 128,000 128,000 128,000 $640,000 $84,000 64,000 32,000 14,000 6,000 $200,000 $205,000 173,000 122,000 83,000 57,000...
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: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $51,000 $161,000 $107,000 $258,000 2 51,000 161,000 82,000 217,000 3 51,000 161,000 41,000 153,000 4 51,000 161,000 18,000 105,000 5 51,000 161,000...
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: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $46,000 $139,000 $97,000 $222,000 2 46,000 139,000 74,000 188,000 3 46,000 139,000 37,000 132,000 4 46,000 139,000 16,000 90,000 5 46,000 139,000...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Cross Continent Trucking Inc. is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $45,000 $146,000 $95,000 $234,000 2 45,000 146,000 72,000 197,000 3 45,000 146,000 36,000 139,000 4 45,000 146,000 16,000 95,000 5 45,000 146,000 6,000...
Average Rate of Return Method, Net Present Value Method, and Analysis The capital investment committee of Overnight Express Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows: Distribution Center Expansion Internet Tracking Technology Income from Net Income from Net Year Operations $56,000 56,000 56,000 56,000 56,000 Cash Flow Operations Cash Flow $171,000 171,000 171,000 171,000 171,000 $855,000 $274,000 231,000 162,000 111,000 77,000 $855,000 $118,000 90,000 45,000 20,000 7,000...
TEXT VERSION: 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: Warehouse Tracking Technology Year Income from Operations Net Cash Flow Income from Operations Net Cash Flow 1 $47,500 $152,000 $100,000 $243,000 2 47,500 152,000 76,000 205,000 3 47,500 152,000 38,000 144,000 4 47,500 152,000 17,000 99,000 5...
Average rates of Return Method, Net Present Value Method, and And The capital investment committee of Ellis Transport and Storage Inc. is considering two The estimated income from operations and net cash flows from each investment are as follows: Tracking Technology Year Income from Net Cash $251.000 wNw Warehouse Income from Net Cash Operations Flow $52,200 $157,000 52,200 157,000 52,200 157,000 52,200 157,000 52,200 157,000 $261,000 $785,000 34,000 212.000 149.00 42,000 18,000 7.000 Total 61,000 $785,000 Each project requires an...