Finch Delivery is a small company that transports business packages between New York and Chicago. It operates a fleet of small vans

that moves packages to and from a central depot within each city and uses a common carrier to deliver the packages between the

depots in the two cities. Finch Delivery recently acquired approximately $$5\mathrm{.}5$ million of cash capital from its owners, and its president,

George Hay, is trying to identify the most profitable way to invest these funds.

Todd Payne, the company's operations manager, believes that the money should be used to expand the fleet of city vans at a cost of

$$800,000.$ He argues that more vans would enable the company to expand its services into new markets, thereby increasing the

revenue base. More specifically, he expects cash inflows to increase by $$340,000$ per year. The additional vans are expected to have

an average useful life of four years and a combined salvage value of $$99,000.$ Operating the vans will require additional working

capital of $$33,000,$ which will be recovered at the end of the fourth year.

In contrast, Oscar Vance, the company's chief accountant, believes that the funds should be used to purchase large trucks to deliver

the packages between the depots in the two cities. The conversion process would produce continuing improvement in operating

savings and reduce cash outflows as follows.

The large trucks are expected to cost $$880,000$ and to have a four$-$year useful life and an $$74,000$ salvage value. In addition to the

purchase price of the trucks, up$-$front training costs are expected to amount to $$17,000.$ Finch Delivery's management has established

a $16$ percent desired rate of return. $($PV of $$1$ and PVA of $$1)$

Note: Use approprlate factor$($s$)$ from the tables provlded.

Required

o$.$&b$.$ Determine the net present value and present value index for each investment alternative.

Note: Round your Intermedlate colculatlons and flnol answers to $2$ declmol places. Enter your answer In dollars and not In millions.