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 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 $19.000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole: Annual cost of servieing, taxes, and licensing $ 3,200 Repairs, first year $ 3,100 Repairs, second year $5.600 Repairs, third year $ 7.600 At the end of three years, the fleet could be sold for one-half of the original purchase price. Lease alternative: The company can lease the cars under a three-year lease contract. The lease coat would be $71,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, icense the cars, and pay all the taxes. Ritovay would be required to make a 615,500 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 15%. Click here to view Exhibit 148-1 and Exhibit 148-2. 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 What is the net present value of the cash flows associated with the purchase alternative? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.). Not present value 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 lease alternative? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Not prosent value Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Which alternative should the company accept? Purchase alternative Lease alternative TTTTTTHYE Present Value of $1;1(1+r) 56 1 ISSO SOLO 8 ISEO OOS O NOZO Periods 4% 59 6% 7% 8% 10% 115 129 13% 1 0.962 0.952 0.943 145 15% 16% 179 18% 0.935 0.9260.9170.9090.901 194 205 215 22 239 245 254 0.893 2 0.885 0.8770870 0.862 0.855 0.847 0.840 0.8330.826 0.820 0.813 0.806 0.925 0.907 0.890 0.8730.8570.842 0.826 0.812 0.797 0.800 0.783 3 0.769 0.7560.7430.731 0.7180.70606940.6830.672 0.61 0.650 0.889 0.864 0.840 0.816 0.794 0.772 0.751 0.731 0.712 0.6930.6750658 0.641 06240609 0.610 4 0855 0.823 0.792 0.763 0.735 0.708 0.6830659 0.636 0591 0.579 0.564 0.55 O 5370524 0.512 0.613 5 0.5920 5720552 0.534 0.516 0.822 0.784 0.747 0.7130,681 0.499 0.482 0.4670451 0437 | 0423 0.410 0.650 0,621 0.593 0.56705130519 0.497 0.476 10.456 0437 0.419 6 0.790 0.746 0.666 0.402 0.386 0.370 0.355 0.341 0.328 0.630 0.596 0.564 0.535 0 507 0.480 0.4560432 04100.390 0.370 0.352 0.3350319 7 0.7600.711 03030.289 0.275 0.162 0.665 0.62305830.5470513 0.4820452 0.425 0.4000 37603540333 0314 0.296 0.279 0263 0.24902150 222 0.210 0.731 0.677 0.627 | 0.582 0.540 0.502 04670434 0404 0.376 0.327 03050.285 0,266 0.249 0.223 0.21% 0.204 9 0.703 0.1910.179 0.168 0645 0.592 0544 0.460 0.424 0.391 0.3610.333 0.308 0.284 0.263 0.243 0.225 0.209 0.1940.180 0.167 0.155 0.144 0.134 10 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.295 0.270 0.347 0.227 0,208 0.1910.176 0.162 0.149 0.737 0.1262 0.116 0107 11 0.650 0.585 0.527 10475 10.429 03 0.350 0.317 0.287 0.261 02170215 0.1950.178 0.162 0.148 0.135 0.123 0.112 0.100 0,094 DON 12 0625 0557 0.497 0444 0.397 0.156 0319 0.286 0257 0231 0.182 0.168 0.152 0.137 10.1240.112 0.1020.092 0.03 0.076 0.069 13 0.601 0.5 0469 0415 0.368 0.326 0.290 0.258 0.229 0.204 0.12 0.163 0.145 0.1300.116 0.104 0.093 0.064 0.075 ODS 0,061 0.035 14 0.577 0.505 0.442 0.388 0.340 0.299 0.263 0.2320205 0.181 0.1600.141 0.125 0.111 099 OORS 0.0280 000 15 0.555 0.41 0.417 0.362 0.315 0.275 0.299 0.209 0.1830.160 0.140 | 0.123 0.10 0,095 0.04 0.074 0.065 0,057 0051 0.000 0035 16 0.53404580.394 0339 0.292 0.252 0.218 0.1 0.163 0 141 0.123 0.107 0.081 0.071 002 003407047 0.002002 17 0.513 0436 0.371 0317 0.2700210.198 0.100.146 0.125 0.105 0.09100D 0.019 0.00000320045 0.019 0014 0.00 0.01 0.023 18 0.4940 A160.350 0.296 0.250 0.212 0.1 0.153011001110095 OON 006 0.044 0.0 003200002000010018 19 0.475 0.396 0331 0.2770232 0.101 0.164 0.13 0.116 000 0020 0.0000051 0043 0037000027002300/200017001 20 04560,377 0.312 0.258 0.215 0.178 0.149 0.1240.104 ON 0.031 0.04300170001 0.026 0,0220019 0,015 0014001 21 0.350 0.419 0294 0,242 0.199 0.164 0.135 003 0.044 0.1120.0930072001 0_0370031 000 0.0200022 ODIN 00150010011 22 0.101 0.422 0.342 0.278 OD 0.2260.1840.150 0.123 0.002 0.026 0.00 0.022 0007 DOIN ODIS 00110011 (1007 23 0262 0.406 | 0.326 0.006 0.211 0019 0010 0.00 0.02700220018 0015001200100 0.1700.1380112 0.0910074OMO ON 107 24 0.110 0.247 OOOD 0.197 0.15 0.12 0102 000 35 0.375 0.295 023 184 0.146 0.116 0.002 0.01000M 0.020 OD1600000000000000000 0074 0059 00470018 000,000 26 0 161 0006 005 004200030026 02100120014 DODO000700XX 0.21 0.220 0.172 0.15 0.106 ODKA TO PO 6100SSUO ZATO STO 9.00 TICO 0.091 ONO ISO 6500 1900 TLOO NEUO900 900 UTOLERO 2000 5000 0051 NOOSEOORIO 010 0100 SIO 100 200 DO 95 ENRI 14B-2 Ege Service Ne Eagle Career Net Gufina/Degree... Present Value of an Annuity of $1 in Arrears, 11-1(1+r)n) Periods 496 5% 6% 7 8% 10% 11% 12% 135 1 0962 0.952 165 15% 0.943 0.935 145 0.926 0.9170.9190.901 17% 185 199 2015 ZIS 0893 225 246 23% 0.885 0.877 0.870 2 255 1.886 1.859 1.833 1808 0X62 0.855 08.070 840 0.8330.826 0.820 0.83 0.806 0.800 1.783 1.759 1.7361.713 1.690 3 2.775 2.723 1668 1.6471.626 1.605 1.585 1.566 1547 2.673 2.624 2.577253124872.444 2.40223612322 2.283 2246 2.210 2.174 2.140 2.106 2074 2.042 2011 1.528 1.3091 492 1.474 1457 1.440 4 3.630 3.5463465 3.387 3.312 3.240 3.1703.102 3037297429142.855 2.798 2743 2.690 1.981 1952 5 4452 4.329 4.2124,100 3.993 2.63925892510 2496 2.448 2.400 2.362 3.890 3.7913.696 3.505 3.5123.4333.392 6 5.242 3.2743.1993.127 3.058 2.991 5.076 4.917 4.767 4.623 44864.355 4.231 2.926 2.864 2.803 2.745269 4.111 3.9983.8893.784 3.6853589 3.098 3410 3.326 3.25 3.167 7 6.002 5.786 5.582 5.389 5.20650334 86H 4.712 4.564 4423 4.288 4.160 3.0923920 2951 4013922 3.8123.706 3.605 3. SON 8 6.733 64636.210 5.971 5.747 3.335 5335 5.14649684.7994694487 3416 327 3.242.161 4.344 4.207 4.028 395438373.726 3.619 9 74357.108 3:518 3:42119 6.8026 S151 6.247 5.9955.759 3.537 5328 3.1324 M6 4.7724.6074451 43034.163403139033.786 3.6733.566 3.463 10 8.1117.7227.360 7.0246.710 6418 6.145 S889 5.65054265 216 5019 483347659 449 4:1394.1924.0543923 3.7993 682 3571 11 8.700 8.306 78877.499 7.139 6.805 5.4956,202 59385.6875.4533 23450294.83646564.486 4.3274.177 4035 3.902 1.7763.656 12 9385 8.863 8.384 7944375367.161 6814 6.4926.1945918560054215.1974,988 4.790 4,611 4499 4.274.1273.9853.8511.725 13 9.986 9 394 8.853 8.358 7.90174877.1036.750 6.4346.12258425.583 5.3425.IIK 49104.715 4333 4.3624.203 4053 1912 1.780 14 10.563 9.899 9.2958.7458.244 7.78673676.982 6.628 6.302 6.002 5.7245 468 5.2295.008 4.802 4.611 4,432 4265 A 10 3.9623.824 15 11.118 10 380 9.712 9.1088.559 8.061 706 7.191 68116.462 | 6.1425.8475.575 5324 5.0924876 4.675 4.4894.31541504001 FR59 16 11.652 10.838 10.106 9,447 8.851 8.313 7.8247.3796.9746,604 6.265 5954 5.6685.405 5.16249184.730 4.536 4.357411900 1867 17 12.166 | 11.274 10.4779.763 9.1228544 8.022 7.5497.1206.7296.373 6047 5.749 5.475 5.222 4.9 4.775 4.376 4.391 4.21949593910 18 12.659 11.690 10.828 10.05993728.756 8.2017.702 7.250 6,8406,4676.128 5818 5.534 5.2735033 48124,608 44194.243 ONO 3.928 19 13.134 12085 11.15 10.336 9.601 8.950 8.365 7.8397.366 6.938 6.550 6.198587735843 5316 1770 4.843565 4.442 4263491973704 20 13 5901246211470 10.5949.818 9.129 8.5147.9637460 7.0256,623 6.259 5.929 562833535.101 48701 4.657 4.460 4.3794.1103.58 21 4.6754476 14.029 12.82111.768 10.836 10.0179 2928 649 4.075 7.562.7.1026.68763123.9235.661843.127 4.891 4.29241213.963 402 4,100 22 14.451 13.163 12.042 11,61 10 201 9.442 R.7728.176 7.6457.170 6.74363596.0115,696 5410 5.191949096 23 14857 13.4891233 11,272 10.3719 580 8.883 8.266 7.718 72067926399 604457295432 5.167 4925 4.7034499 4311 4.1373.976 6.434607357455.451 5.112 4.9374713 4.507 4.IR 4.140 3.991 24 15.247 13,799 12.550 11.469 10.529 9.77 1.985.3487.2847281 6.35 25 49484.72143144.1414795 15.622 14.994 12.783 11.654 10 675 9.823 9.0778422784373306.873 6.46160975.766 5.467 5.195 540320 26 9.161 8.4887967372 6.906 6.491 618 5,783 15 58314375 11.003 11.826 108109929 4.956 4.72845X4.32 411 3.98