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The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then

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The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cafs after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To prcvide a replacement fleet, the company is considering two alternatives. Purchase airernative: The company can purchase the cars, as in the past, and sell the cars after three years of use, Ten cars will be needed, which can be purchased at a discounted price of $20,000 each. If this alternative is accepted, the following costs, will be incurred on the fleet as a whole: At the end of three years, the fleet could be sold for one-half of the original purchase price. Lease a/ternative: The company can lease the cars uncter a three-year lease contract. The lease cost would be $55,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the would provide all servicing and repairs, license the cars. and pay all the taxes. Riteway would be required to make a $13,000 security deposit at the beginning 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 19%. Click here to view Exhibit 1281 and Exhibit 128.2, to determine the appropriate discount factor(5) using toblesi Required: What is the net present value of the cash flows associated with the purchase aiternative? What is the net present vaiue of the cash flows associated with the lease alternative? Which alternative should the company accept? Complete this question by entering your answers in the tabs below. What is the net present value of the cash flows associated with the purchase alternative? (Enter negative amount with minus sign. Round your intermedlate calculations and final answer to the nearest whole dollar amount.) What is the net present value of the cash ffows associated with the lease aiternative? (Einter negative amount with a minus ign. Round your intermediate calcutotions and finat answer to the nearest whole dodlar amount.) Which alternative should the company accept

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