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Problem 10-16A (Algo) Using present volue techniques to evaluate alternative investment opportunities Lo 102 Waiton Belivery is a small company that transports business packages between New York and Chicago. It opepates a fleet of amall vans that moves packages to and from a central depot within each city and uses a common carrier to deliver the pockages between the depots in the fwo cities. Walton Delively recently acculied approximately $70 millon of cash capital from its owners, and its presiderit, 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 cify vans at a cost of 5720,000 He argues that more vans would enable the company to expond its services into new markets, thereby increasing the revenue base. More specifically, he expects cash infiows to increase by $230000 per year. The addanonal vans are erpected to have an average useful life of four years and a combined salvoge valve of $103,000. Operating the vans will require additional working capital of $39,000, which witl be recovered at the end of the founth year: In contast, Oscar Vance, the company's chief accountant believes that the funds should be used to purchase large truck to deliver the paekages between the depots in the two cites. The conversion process would produce continuing improvement in operating savings and reduce cash outflows as follows The large tuveks are expected to cout $800,000 and to have a foulyear useful life ond a 584,000 salvage vaiue in addition to the purchape pace of the trucks, up-ftont training costs are expected to amoum to $18,000. Watton Delivery's maragement has established a 12 percent desired rate of retum. (EV of St and PBA of i (Ule oppropriate factor(s) from the tables provided) Required 6. cb. Determine the net present value and present value index for each inventment alterhative. [Aound your intermediate colcutetions and finnt answers to 2 decimat ploces, Enter your answer in whole dolines ond not in miltions)