The Riteway Ad Agency provides cars for iss sales staff. In the past, the company has afwass purchased its cars from a dealer and then sold the cars after three years of use. The company's present fleet of cars is three years old and will be sold very shorly. To provide a replacement flet, the company is considering two alkernatives: Purchase alternaribs: The company can parchase the cars, as in the past, and sell the carsafter throe years of use. Ten cars will be needed. which can be purchased at a discounted price of $17,000 each. If this alternative is accepted, the followifig costs will be incurred on the fleet as a whole: A the end of three years, the flect could be wad for one-hatf of ise arieinal purchase price. payment dae at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, licemae the ears, and pay all the taxes. Rileway would be required to mabe a $10,000 wecurity deponit at the berinning of the lease period, which woald be refunded when the cars were retumed to the owner at the end of the lease contract. Riteway Ad Azency's required rate of return is 18%. Required: 1. What is the net present value of the cash flows associated with the purchase aliernative? Round all dollur amounts to the nearest whole dollar: 2. What is the net present value of the cash flows associated with the lease alternative? Round all dollar amounts to the Bearst whole dallar. 1. Which alternative should the company accept? 1. The present value of the purchase alternative is computed as follows: Purchase Alternative: 2. The present value of the lease alternative is computed as follows: Lease Alternative