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 cars after three years of use. The company's present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives: Purchase alternative The company can purchase the cars, as n the past, and all the cars after tree years of us. Ten care will be needed, which can be purchased at a discounted price of $20,000 each. If this alorrate is socopted, the following costs will be incurred on the fleet as a whole 5300 200 Arual coul of servicing, tous, and licensing Rupar, frot year Rupaire, second year Repairs, third year At the end of three years, the fleet could be sold for one-half of the original purchase price. Lease alternative The company can lose the cars under a three year lease contact. The l e cou would be 572,000 per your (he frut payment due at the end of your 1) As part of this cout, the owner would provide al servicing and repairs, lore the corn, and pay all the tous would be required to make a $ 16,000 mcurity deposit at the beginning of the late period, which would be refunded when the cars were returned to the owner at the end of the base contact nonnulerenuired rate of return is 16%. Riteway Ad Agency's required rate of return is 16%. Click here to view Ext 7B-1 and Exhibit 7B-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? (Round your final answer to the nearest whole dollar amount. Enter negative amount with a minus sign.) Nel present value Required 2 > EXIBIT 70-1 Present Value of $1 ader mm Periods 4% 5% 6% VII 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 1 0962 0952 0943 01 0926 0917 0009 0901 0893 085 0.87708700862 0855 0 847 0 840 0833 0826 0 820 013 006 ORE 2 0925 0907 0.890 0873 0857 0842 0826 0.812 0797 0783 0769 0.756 0743 0731 0718 0706 0.694 0683 0672 0661 0650 064 3 0889 0864 0840 0816 0.794 0772 0751 0731 0712 0.693 0675 0658 0641 0624 0609 0.593 0.579 0564 0.551 05370524 051 4 0855 0823 0.792 0763 0735 0708 0683 0.659 0636 0613 0.592 0.572 0.552 0534 0.516 0.499 0.482 0467 0.451 0.437 0423 0.41 5 0822 0.784 0747 073 0681 0650 0621 0.593 0567 0543 0.519 0.497 0.476 0.456 0.437 0.419 0.002 0386 0.370 0355 0341032 6 0.790 0746 0705 0666 0630 0596 0564 0.535 0507 0480 0.456 0.432 0.410 0390 0370 0352 0335 0319 0.303 0289 0275 026 7 0760 071 0665 0623 0583 0547 0513 0.482 0.452 0425 0.400 0.376 0.354 0333 0314 0296 0 279 0263 0.249 0235 0222 0.210 8 0731 06770627 0582 0540 0502 0.467 0.434 0.404 0376 0.351 0327 0305 0285 0 266 0249 0 233 0218 0204 0191 01790168 9 07030645 0592 0544 05000460 0424 0391 0.361 0333 0.308 0284 0263 0243 0225 0209 0194 01800167 0155 0144 0134 10 0676 0614 0558 0508 0463 0422 0386 0352 0322 0295 0.270 0247 0227 0208 0191 0176 0.162 0149 013701260116 0107 11 0650 0585 0527 0475 0429 0388 0350 0317 0287 0261 0237 0.2150195 0178 0162 0.148 0135 0123 01120103 0094 008 12 0625 0557 0497 0.444 0 397 0356 0.319 0286 0257 0231 0.208 0187 0168 0152 0.137 0124 01120102 0092 0083 0076 0069 130601 0530 0.469 0415 0.368 0326 0290 0258 0229 0204 0182 0163 0145 0130 0116 0104 0093 0084 0075 0068 0061 0.055 14 0577 0505 0.442 0388 0340 0299 0263 0232 0205 0181 01600M1 0125 0111 0.099 0.088 0.078 0.069 0062 0055 0049 0040 15 0555 0.481 0.417 0.362 0.315 0275 0239 0209 0183 01600140 0123 0108 0.095 0.084 0074 0065 0057 0051 0045 0040 0.035 16 0534 0458 0394 0339 0292 0252 0.2180188 0163 0141 0.123 0107 0093 0.081 0071 0062 0.054 0.047 0.042 0.036 0.032 0.028 17 0513 0436 0371 03170270 0231 0198 01700146 01250108 0093 00800069 0060 0052 0045 0.039 0.034 0.030 0026 0.023 18 0494 0416 0350 0.296 0250 0212 01800153 0130 0111 0095 0081 0069 0059 0051 0044 0038 0.032 0.028 0.024 0.021 0.018 19 0475 0396 0331 0277 0232 0194 0164 0138 0116 0098 0083 007000600051 0043 0037 0031 0027 0023 0.020001700M 200456 0377 0312 0258 02150178 0149 0124 0104 0087 0073 0061 0051 0043 0037 0031 0026 00220019 0016 00140012 21 0.439 0359 0.294 0242 0199 0164 0135 01120093 0077 0.064 0.053 0044 0.037 0.031 0.025 0.022 0.018 0015 0.0130011 0.009 22 0422 0342 0278 02260184 01500123 01010083 0068 0056 0046 003 00320026 0.022 0018 00150013 001 0.009 0007 23 0406 0326 0262 021101700138 01120091 0074 0060 0049 0040 0033 0027 0.022 0018 0015 0012 0010 0009 0007 0006 24 03900 3100247 0197 0158 0126 0102 0082 0066 0053 0043 0035 0028 0023 0019 0015 001300100008 0007 0006 0005 25 0375 0295 0233 0184 016 01160092 0074 0059 0047 0038 00300024 0.0200016 0013 0010 0009 0.007 0.006 0005 0001 26 0361 0281 0220011201350106 0084 0066 0.053 0042 0033 0026 0.021 0.01 0.014 0011 0009 0.007 0.006 0.005 0.004 0.003 27 0347 0258 0207 0161 0125 0098 0076 0060 0.047 0.037 0029 0023 0.018 0014 0011 0009 0.007 0.006 0005 0004 0.003 0002 28 0333 0255 0196 01500116 00900069 0054 0042 0033 0026 00200016 0012 0050 0008 0005 0005 0004 0003 0002 0.002 29 0321 0243 0185 01410107 0082 0063 0048 0037 0029 0022 001 0014 001 0008 000600050004 0003000200020002 300308 0231 0174 0110099 0075 0057 0044 0033 0026 0020 0015 0012 0009 0007 00050004 0003 0003 0002 0.002 0001 40 02080142_0097 0067 0046 0032 0022 0.015 0011 0008 0.005 0.004 0003 0002 0.001 0.001 0.001 0000 0000 0000 0000 0000 HIT - Prudent Value of an Annuity of St in Arrart 1 - Periods 5% 6% 7% 8% 9% 10% 11% 12% % % 15% 15% 17% 18% 19% 20% 21% 22% 22% 24% 25% 1 09620952 0913 0935 0.926 0917 0.909 0.901 0893 0885 0.877 0.870 0.862 0855 0.847 0.840 0833 0.826 0820 0813 0805 0.800 2 1886 1859 1833 1808 1783 1759 1736 1713 1690 1668 1647 1626 1605 1585 1566 1547 1528 1509 1492 1474 1457 1440 3 2775 2723 2673 2624 2577 2531 2487 2444 2402 2361 2322 2283 2246 2210 2174 2402106 2074 2042 2011 1981 1952 4 3630 3546 3.4653387 3312 324031703102 3037 2974 294 2855 2798 273 2690 2639 2589 2540 2494 2448 2404 2362 5 4452 4329421245003983 3890 3791 3.696 3.605 3517 3.433 3.352 3274 3199 31273058 2991 2926 2.854 2803 2745 2689 6 5242 5076 4917 4767 4623 AM 355 4231 4111 3998 3889 3784 3685 3.589 3.498 3.410 3326 3245 3167 3.092 3020 2951 7 6.002 5786 558253895 206 4868 472 4561 4423 4288 4160 4039 3922 3812 3.706 3.6053508 3.416 3327 3242 3161 8 6733 5.4636210 5971 5747 5535 5335 516 4968 4799 4639 4487 43444207 4078 3.954 3.837 3726 359 358 3.4213329 9 7435 7108 6802 6.515 6 247 5995 5759 5537 5328 5132 4946 472 4607 4451 4303 4163 4031 3905 3786 3673 3566 3.463 10 8.11 772 7360 7024 6710 6.418 6145 5.889 5650 5426 5216 5.019 4833 4659 4494 4339 4192 4054 3.923 3.799 3.682 3571 11 8.760 8.306 78877499 7139 6805 64956207 5938 5687 5453 5 234 5029 48364656 4486 4327 4177 4035 3902 37763656 1293858863 8384 7943 7536 7161 684 6.492 6194 5918 5.660 5421 5197 4988 47934611 4439 4278 427 3.585 3851 3725 1 9986939488538358 7904 7487 71036750 6.424 6122 58425583 5342 5118 4910 475 4533 4362 4203 4053 3912 3780 10.563 9899929587458247786 7367 6982 6 628 6 302 6002 5724 5468 5229 5008 4802 461 4432 4265 4108 3.962 3824 15 91118 90380 9712 9.108 8559 8061 7606 7191 6811 6462 6142 5.847 5.575 5324 5.092 4876 4675 4.489 4315415340013859 11652 10838 10.106 947 88513137824 7379 6974 6604 6265 5 954 5568 5405 51624938 4730 4536 4357 41894033 3887 17 0.166 11274 10.477 9763 912285648022 7549 7120 6729 6373 6047 5749 5.475 5222 4990 4775 4576 439142194059 3.910 18 2659 1690 10828 10.059 931287568.201 77022250 6840 6.467 61285.818 5534 5273 5033 48124608 4.419 4243 4.080 3.928 19 134 12085 1115810336 9601 8950 8365 78397366 6938 6550 6198 5877 5584 53165070 4813 4635 4442 4263 4097 3942 203.590 1246211470 10.594 9818 9129 8572963 7469 7025 6623 6259 5929 5628 5353 5101 4870 4657 4460427941103954 21 029 12821 1175410836 100179292 8649 8075 7562 702 6587 6312 5 973 5665 5384 51274891 4675 4476 4292 4121 3563 22 451 3.163 204211061 30 201 942 872 8176 7545 770 673 6359 601 5696 5410 5149 4909 4690 4488 3024303970 23 .857 13.489 2 303 11272 10.371 9.580 8883 8266 7718 7230 6792 6.399 6044 5723 5.432 5167 4925 4.703 4499 4.3114137 3.976 24 15 247 13 799 12550 11469 10.529 97078985 8348 7784 7283 6835 6434 6073 5746 5451 5182 4937 473 4507 43184133981 25 5622 4094 12783 1654 10675 923 907784227813 7330 68735 464 6097 566 5 057 519549684721451323 417395 265983 14375 3003 11826 1081 99299161 BAR 786 7372 69066491 6115783 54805 206 4956 4728 4520 43284151 3.968 27. 16330 1603 12111987 1935 10027 9237 8548 7943 7409 6935 654 61365798 5492 5215 4964 4734 4.524 433241543990 28 1653 14898 13.406 12137 1105110116 9307 8602 7984 7441 6961 6.534 6.152 5.810 5.502 5223 4920 47394528 433541573992 29 6.984 15.141 3591 12.278 1115810198 9370 8650 8022 7470 6983 6551 6166 5800 5510 5229 49754143 4531 4337 41593994 3017292 15372 3765 2009 1125 10276 9421 8694 8055 7896 7003 6565 67 529 551 5235 4979 470 4534 433941603955 0 9793 1795046 13 11975 10752 97798951 8244 763471056642 6 233 5815548 5258 4997 4760 4544 4347 4165