Part C: Enter your discussion below using full sentences. Should the company invest in the "city vans" (Option #1) or the "large trucks (Option #2)? which alternative would you recommend on a quantitative basis and why? Full sentences, labels and proper grammar are required Given Data P10-16A SPEEDY DELIVERY Cash capital acquired $ 6,000,000 Alternative 1: Cost of new vans Expected annual cash inflow increase Useful life of new vans Combined salvage value of new vans Additional working capital needed $ 720,000 $260,000 4 $ 80,000 $40,000 Alternative 2: Cost of new trucks Reduction in cash outflow-year 1 Reduction in cash outflow-year 2 Reduction in cash outflow-year 3 Reduction in cash outflow-year 4 Useful life of new trucks Salvage value of new trucks Training costs required $ 800,000 S 140,000 $300,000 $360,000 $400,000 4 $ 65,000 $ 16,000 Desired rate of return 10% 1Student Name: Enter your name here Note: Read the pg 327 scenari Class: Enter class period here and compute the NPV for each Problem 10-16A (pg 327) option. Then address Part C Using Present Value to evaluate alternative investments SPEEDY DELIVERY, INC Net Present Value Calculations 159 Minimum Desired Rate of Return: 10% 8 Alternative 1: 9 Cash Inflows 10 Annual Cash Inflows 11 Salvage Value 12 13 14 Cash outflows (enter as negative numbers 15 16 17 Net Present Value (NPV) 18 19 Alternative 2: 20 Cash Inflows 21 22 Year 2 Exact Amount Table Value Present Value Working Capital Recovery Total cash inflow Cost of Vans Working Capital Increase Try again! Exact Amount Table Value Present Value Year 1 Year 3 Year 4 24 25 Salvage Value 26 27 Cash Outflows (enter as negative numbers 28 29Training Cost 30 Net Present Value (NPV) 31 32 33 b. Present Value Index (pg 312). Max of two decimals 34 35 36 37 Total cash inflow Cost of Trucks Try again! Alternative 1 Alternative 2