Tie Fighter Delivery is a small company that transports Kyber crystals between Lothal and Bespin. It operates a fleet of small transport ships that moves crystals to and from a central depot within each planet and uses a common carrier to deliver the crystals between the depots on the two planets. Tie Fighter Delivery recently acquired approximately $6.6 million of cash capital from its owners, and its president. Lando Calrissian, is trying to identify the most profitable way to invest these funds. Han Solo, the company's operations manager, believes that the money should be used to expand the fleet of transport ships at a cost of $650,000. He argues that more ships would enable the company to expand its services into new markets, thereby increasing the revenue base. More specifically, he expects cash inflows to increase by $290,000 per year. The additional ships are expected to have an average useful life of four years and a combined salvage value of $108,000. Operating the ships will require additional working capital of $34.000, which will be recovered at the end of the fourth year. In contrast , Luke Skywalker, the company's chief accountant, belleves that the funds should be used to purchase a freighter to deliver the crystals between the depots in the two citles. The conversion process would produce continuing improvement in operating savings and reduce cash outflows as follows. 5166,000 5324,000 Year $400,000 Year 4 $.445,00 The large freighters are expected to cost $730,000 and to have a four-year useful life and a $78.000 salvage value. In addition to the purchase price of the freelghters, up front pilot training costs are expected to amount to $12,000 The Fighter Delivery's management has established a 14 percent desired rate of return. (EVS1 and PVA 1 SL (Use appropriate foctor(s) from the tables provided.) Required 0.8b. Determine the net present value and present value index for each trivestiment alternative (Round your intermediate calculations and final answers to 2 decimal places. Enter your answer in whole dollars and not in millions.) Purchase of Transport Ships Purchase of Pout Present Venue (PPV) 020617 roscop Socio COLZOO 90100 OTTO STICO OSOBITCO OBSOLEO ESCOSTO IOCICO 2006 OCTOCOOO 2011 DOSTOT TIZICOSOCOLO ISOCCO CLSOCO 19TO 01 19.OO 16000 TOTOO O OTOCIO otoco6610 OF COSTO TOBCOVO TESSIVO 329COPO TOTOO LOCOSO OZOLO POSTO TOIZO OZOLTO TZS9ICO CO2910 CLCCISO I SGO00 2016 OCIO ECONO OLSISC006TOCO SELECO OCESO 90 COO900 COLO 00000000000 COLOZO DESTZO IT SICO OPTOCO 101ST O LORZOD SOSIO OILSIO OZOTOCO FOTOFO USD IOCZTO T9600 TESTO 09028FO POZO 608910 LSIZIO CO910 OSSZOZO CLOOSZO SIO OSSEO LOCO CHOO 6969610 SSSTIO OLIZZO TOTOSTO EOSLITO COSSETO COOLTO 9051910 ZOOZO ZIZCO CTCSSCO TIPO 1900 EOS O LOCE610 COSZOCO 0190980 S6OTETO STOP O ORZOSO COETSO OSSOSED CICCOPO ZOS9900 990 IOS O 69CORSO LESOCO OTSZSPOSICISO TEOLTS O 001COSO COITO ZSSSSTO 169XSOT 1950 SZSTO ODIO 09COSO LCTOS 1C00290 1 foto S SUZSTO TOCESSO 0302OSO CIOS90 STUSOLO TOLSLSO SS90190 TOP200 OO TICO STEISZO SCICLO ZESPOLO SESE90 966390 E COICTZO SOF0920 t612620 91TOSO 0891130 OCELSSO 690293 0 FOLLO 292690 160606 0 LE2160 9265760 ELSPOO IDEZS60 SES 1960 1 591 PI ZI SOT %6 958 39 31 M 020054 0.262953 0.305025 0.35031 10 0.197045 0371364 0217639 0 453113 0.393646 0417265 15 0.355265 0263331 0299246 0.505003 14 0.577475 0.414961 0.3676900326170 0.259064 0.60057 053021 13 12 0.624597 0.556837 0 526756 0.584629 0649531 11 0358395 0.675565 0.613913 10 0.044609 0.591998 0.702587 9 0.582009 0627412 30.7306900676839 0.622750 0665057 70.7599130.710631 0.6301700596 267 0.666342 0.746215 0.701961 0.790315 6 0.821927 0.783526 0.747253 0712956 0630533 0735030 4 0554504 0.322702 0.792094 0762995 0.339619 O S16293 0.373439 0.924556 0.907029 0.559996 2 0.943390 7 0.232365 0279062 0334395 ODO 0.635519 0914 0.833333 20 55 TABLE 1 PRESENT VALUE OF $1
