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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 cars after three years of use. The company's present feet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives: Purchase alternativer the company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be teeded, which can be purchased at a discounted price of $14,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole Annual Cont of servicing, taxes, and conding Yepairs, first year Yapaira, second year Sepairs, third year 63,400 $ 3,300 $ 5,800 57.000 At the end of three years, the fleet could be sold for one-half of the original purchase price Lente alternativet the company can leave the cars under three years payment due at the end of Year 1). As part of this lease coat, the owner would provide all servicing and repair cent the $16,500 security deposit at the beginning of the lease period, which would be retarded when the cars were returned to the owner at the end of the lease contract. Riteway Ad Agency's required rate of return is 17% Click here to view Exhibit2-1 and Exhibit:1282, to determine the appropriate discount foctor(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) 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.) Net present $ 117,104

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