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The Riteway Ad Agency provides cars for its sales staff in the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly To provide a replacement fleet, the company is considering two alternatives Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $24,000 each. If this alternative is accepted, the following costs will be incurred on the fleet sa whole: Annual cost of servicing, taxes, and licensing Repairs, first year Repairs, second year Repairs, third year $ 4,000 $ 1,900 $ 4,400 $ 6,400 At the end of three years, the teet could be sold for one half of the original purchase price Leone alternative The company can lease the cars under the year lease contract, The lease cost would be 559,000 per year (the first payment due at the und of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cacs, and pay all the taxes Ritmay would be required to make a $15,000 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract. Riteway Ad Agency's required rote of return is 18% Click here to view Exhibit 128.1 and Exhibit 120 2. to determine the appropriate discount factor(s) using tables. Required: 1. What is the net present value of the cash flows associated with the purchase alternative? 2. What is the net present value of the cash flows associated with the lease alternative? 3. Which alternative should the company accept? Complete this question by entering your answers in the tabs below. Tease the cars under a three-year sease contract. Ine lease cost would be $59,880 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes. Riteway would be required to make a $15,000 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract. Riteway Ad Agency's required rate of return is 18% Click here to view Exhibit.128.1 and Exhibit 128-2. to determine the appropriate discount factor(s) using tables Required: 1. What is the net present value of the cash flows associated with the purchase alternative? 2 What is the net present value of the cash flows associated with the lease alternative? 3. Which alternative should the company accept? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the net present value of the cash flows associated with the purchase alternative? (Round your final answer to the nearest whole dollar amount. Enter negative amount with a minus sign.) Net present value Required 2 > Lease alternativet in company can Lease the cars under three-year lease contract the lease cost would be $59.800 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes Riteway would be required to make a $15,800 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract. Riteway Ad Agency's required rate of return is 18% Click here to view Ext 128:1 and Exhibit 128 2. to determine the appropriate discount factors) using tables Required: 1 What is the net present value of the cash flows associated with the purchase alternative? 2. What is the net present value of the cash flows associated with the lease alternative? 3. Which alternative should the company accept? Complete this question by entering your answers in the tabs below. Required: Required 2 Required What is the net present value of the cash flows associated with the lease alternative? (Round your final answer to the nearest whole dollar amount. Enter negative amount with a minus sign) Net present value (Required 1 Required 3 > Lease alternative une company can lease the cars unoer a three-year lease contract. The lease cost would be $59,000 per year the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes. Riteway would be required to make a $15,000 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract. Riteway Ad Agency's required rate of return is 18% Click here to view Exhibit 128-1 and Exhibit 12B-2. to determine the appropriate discount factors) using tables, Required: 1. What is the net present value of the cash flows associated with the purchase alternative? 2. What is the net present value of the cash flows associated with the lease alternative? 3. Which alternative should the company accept? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reqqired Which alternative should the company accept? Lease alternative Purchase alternative Required 2