Problem 14-25 (Algo) Net Present Value Analysis of a Lease or Buy Decision (L014-2] The Riteway Ad Agency provides cars for its sales stall the past, the company has always purchased the came and then sold the cars after three years of use. The company's present feet of the years old and will be sold very shortly to provide replacement Meet the company is considering two alternatives Purchase alternatives The purchase the in the past, all the after the end purchases 320 tative i pt the Falling til en the w al cost of reind Hunting Nepales fast year Hepairs and year topless they $ 100 $). $ 11,00 At the end of three years, the feet could be sold for one half of the original purchase price Les alternative The lease the care under the year les contract Seart would $2,000 year the first part end of Yeart of this last, the owner or 11 servicing and repairs, licen the cas, y te Bitwy would be take $15,00 cerity deposit beginning of the leave period, and ended whether turned to that the end of the contract Riteway Ad Agency's required rate of retumis 16 Click here to view Exhib14:1 and Exh 140 2. to determine the appropriate discount factors using tables Dihs 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 16% Click here to view Exhibit 148.1 and Exhibit 148-2. 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? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Natsen va ( Retait di. Required 2 > Click here to view Exhibit 14341 and Exhibit 148:2. 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 Required 3 What is the net present value of the cash flows associated with the lease alternative? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Nor present value (Required 1 Required 3 > Click here to view Exhibit 148-1 and Exhibit 1482to 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 Required Which alternative should the company accept? Purchase alternative Loase alternative Click here to view Exhibit 14341 and Exhibit 148:2. 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 Required 3 What is the net present value of the cash flows associated with the lease alternative? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Nor present value (Required 1 Required 3 > Click here to view Exhibit 148-1 and Exhibit 1482to 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 Required Which alternative should the company accept? Purchase alternative Loase alternative
