The Riteway Ad Agency provides cars for its sales staft 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 provile a replacement fleet, the company is considering two alternatives Aurchase at ternative: The coepany can purchase the cars, as in the past, and sel1 the cars after three years of use. Ten cars win be needed, which can be purchased at a discouated price of 514,090 each. If this alternative is accepted, the follouing costs wil1 be incurred on the fleet as a istiole: At the end of three years, the fleet could be sold for one-hait of the oniginal purchase price. Lease alternotive: The coopany can lease the cars under a three-year lease contract. The lease cost woula be 573 , eee per year (the first paynent due at the end of Year 1). As port of this lease cost, the owner mould provide all servicine and reoairs, 1icense the cars, and poy all the taxes. Biteway would be required to make a $16,500 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the ouner at the end of the lease contract. Riteway Ad Agency's required rate of return 1517% Click here to view Exthibit 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 aitemative? 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. Riteway Ad Agency's required rate of return is 17%, Click here to vlew Exhibit 14B-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 assoclated with the purchase altemative? 2. What is the net present value of the cash flows assoclated with the lease alternative? 3. 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 a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.) At the end of three years, the fleet could be sold for one-half of the oniginal purchase price. Lease alternative: The company can lease the cars under a three-year lease contract. The lease cost would be $73,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the oiner would provide al1 servicine and repairs, license the cars, and pay a11 the taxes. Riteway would be required to make a $16,500 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 17% Click here to vlew Exhibit 148-1 and Exhibit 14B-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 attemative? 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. What is the net present value of the cash flows associated with the lease alternative? (Enter negative amount with a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar amount.) Riteway Ad Agency's required rate of return is 17%. Click here to view Exnibit 14B-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. Which alternative should the company accept
