TABLE 1 PRESENT VALUE OF $ 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 2 0.924556 0.907029 0.889996 0873439 0.857339 0841680 0.826446 0797194 0769468 0743163 0.694444 3 0.888996 0.863838 0.839619 0.816298 0.793832 0772183 0.751315 0711780 0.674972 0640658 0.578704 4 0.854804 0.822702 0792094 0 762895 0.735030 0708425 0.683013 0.635518 0.592080 0.552291 0.482253 5 0.821927 0783526 0747258 0712986 0680583 0649931 0.620921 0.567427 0.519369 0476113 0.401878 6 0.790315 0746215 0.704961 0.666342 0.630170 0.596267 0.564474 0.506631 0.455587 0.410442 0.334898 7 0.759918 0.710681 0.665057 0.622750 0.583490 0.547034 0.513158 0452349 0.399637 0.353830 0.279082 8 0.730690 0.676839 0.627412 0.582009 0.540269 0.501866 0.466507 0403883 0.350559 0.305025 0.232568 9 0.702587 0644609 0.591898 0543934 0.500249 0.460428 0424098 0.360610 0.307508 0.262953 0.193807 10 0675564 0613913 0.558395 0.508349 0.463193 0.422411 0.385543 0.321973 0.269744 0.226684 0161506 11 0.649581 0.584679 0.526788 0.475093 0.428883 0.387533 0.350494 0.287476 0.236617 0.195417 0.134588 12 0624597 0.556837 0.496969 0.444012 0.397114 0.355535 0.318631 0.256675 0.207559 0.168463 0.112157 13 0.600574 0.530321 0.468839 0.414964 0.367698 0.326179 0.289664 0.229174 0182069 0.145227 0.093464 4 0.577475 0.505068 0.442301 0.387817 0.340461 0.299246 0.263331 0.204620 0159710 0125195 0.077887 15 0.555265 0481017 0.417265 0.362446 0.315242 0.274538 0.239392 0182696 0.140096 0.107927 0064905 16 0.533908 0458112 0.393646 0.338735 0.291890 0.251870 0.217629 0163122 0.122892 0093041 0054088 17 0.513373 0.436297 0.371364 0316574 0.270269 0.231073 0.197845 0145644 0.107800 0.080207 0.045073 18 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 0.179859 0130040 0.094561 0069144 0.037561 19 0.474642 0.395734 0.330513 0.276508 0.231712 0194490 0.163508 0.116107 0.082948 0.059607 0.031301 20 0.456387 0.376889 0.311805 0 258419 0.2145480.178431 0.148644 0103667 0.072762 0.051385 0.026084 PRESENT VALUE OF AN ANNUITY OF $ TABLE 2 4% 5% 6% 796 8% 9% 10% 12% 14% 16% 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0877193 0.862069 0.833333 2 1886095 1859410 1.833393 1808018 1783265 1759111 1.735537 1.690051 1646661 1605232 1.527778 3 2.7750912.723248 2.673012 2.624316 2.577097 2.531295 2.486852 2.401831 2.321632 2.245890 2.106481 4 3.629895 3.545951 3465106 3.387211 3.312127 3.239720 3.169865 3037349 2.913712 2.798181 2.588735 5 4.451822 4.329477 4.212364 4.100197 3.992710 3.889651 3.790787 3.604776 3.433081 3.274294 2.990612 6 5.242137 5.075692 4.917324 4.766540 4.622880 4.485919 4.355261 4.111407 3.888668 3.684736 3.325510 7 6.002055 5.786373 5.582381 5.389289 5.206370 5.032953 4.868419 4.563757 4.288305 4.038565 3.604592 8 6.732745 6.463213 6.209794 5.971299 5.746639 5.534819 5.334926 4.967640 4.638864 4.343591 3.837160 9 7435332 7107822 6.801692 6.515232 6.246888 5.995247 5.759024 5.328250 4.946372 4.606544 4.030967 10 8.110896 7721735 7360087 7023582 6710081 6.417658 6144567 5.650223 5.216116 4.833227 4.192472 11 8.760477 8.3064147886875 7498674 71389646.805191 6.495061 5.937699 5.452733 5.028644 4.327060 12 9.385074 8.863252 8.383844 7.942686 7536078 7160725 6.813692 6.194374 5.660292 5.197107 4.439217 13 9.985648 9.393573 8.852683 8.357651 7903776 7.486904 7103356 6.423548 5.842362 5.342334 4.532681 14 10.563123 9.898641 9.294984 8.745468 8.2442377786150 7.366687 6.628168 6.002072 5.467529 4.610567 15 11.118387 10.379658 9.712249 9.107914 8.559479 8.060688 7606080 6.810864 6.142168 5.575456 4.675473 16 11.652296 10.837770 10.105895 9446649 8.851369 8.312558 7.823709 6.973986 6.265060 5.668497 4.729561 17 12.165669 11.274066 10.477260 9.763223 9121638 8.543631 8.021553 7119630 6.372859 5.748704 4.774634 18 12.659297 11689587 10.827603 10.059087 9.371887 8755625 8.201412 7.249670 6467420 5.817848 4.812195 19 13.133939 12.085321 11158116 10.335595 9.603599 8.905115 8.364920 7.365777 6.550369 5.877455 4.843496 20 13.590326 12.462210 11.469921 10.594014 9.8181479128546 8.513564 74694446.623131 5.928841 4.869580 Walton 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. Walton Delivery recently acquired approximately $5.5 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 $640,000. 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 $290,000 per year. The additional vans are expected to have an average useful life of four years and a combined salvage value of $104,000. Operating the vans will require additional working capital of $44,000, 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 Year 1 Year 2 Year 4 Year $168,000 $324,000 $407,000 $440,000 The large trucks are expected to cost $720,000 and to have a four-year useful life and a $71,000 salvage value. In addition to the purchase price of the trucks, up-front training costs are expected to amount to $10,000. Walton Delivery's management has established a 12 percent desired rate of return. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a.&b. Determine the net present value and present value index for each investment alternative. (Negative amounts should be indicated by a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Purchase of CityPurchase of Vans Trucks a. Alternative 1 (NPV) b. Alternative 2 (PVI)