urgent help please

13 The Wrongway 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 as follows: 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 $20.000 each of this alternative is accepted the following costs will be incurred on the fleet as a whole 10 points 02A ww cost of servicing tave, and licensing Minuar Nr. year 2 s. years 5,20 2.00 4. .. At the end of three years, the fleet could be sold for one-half of the original purchase price Lege Altemative. The company can lease the cars under a three-year lease contract. The lease cost would be 566,750 per year with the first payment due at the end of year 1). As part of this lease cost, the owner would provide all servicing and repairs, cense the cars and pay all the taxes. Wrongway would be required to make a $12.250 security deposit at the beginning of the base period which would be refunded when the cars were returned to the owner at the end of the Sease contact Wingway required rate of retumis 18% Click here to view and 02.10 determine the appropriate count factors using tables Required donne income to 13 Wrongway's required rate of return is 18% Click here to view Exhibit 10-1 and Exhibit 10-2. to determine the appropriate discount factor(s) using tables Required: fignore income taxes) 1. Use the total cost approach to determine the present value of the cash flows associated with each alternative. Negative amounts should be indicated with a minus sign. Round discount factor(s) to 3 decimal places. Round other intermediate calculations and final answers to the nearest whole dollar amounts.) 10 Doints 024168 Present Value of Cash Flows Purchase of foot of cars Cons of foot of cars 2. Which alternative should the company accept based on the calculations in Requirement? Purchase of fleet of cars Lease of feet of cars EXHIBIT 10-1 Present Value of $1 P 1 19 8 LIT 192 SEN LO 1890 Co POLO 1100 Pero 104 12 16% 15% 2014 22 28 1 092 0952 0943 0976 09090893 0877 02 0847053 050 0.806 0.794 07810769 0714 2 0.925 0.907 6890 0857 0,826 0.797 0.709 0,743 0715 0.69 0.672 0650 0.60 0.610 0.592 0.310 0.899 0866 0.540 0.794 075107120675 0641 O 0.579 035 0324 0500 0.477 0.455 0164 4 0.855 0.323 0.792 0.735 0.683 0636 0.592 0.552 6516 0.482 0.451 0.33 0.397 0.373 0350 0.260 3 0822 0784 0149 0567 0.519. 0476 0437 0.40 0.370 0341 0315 0291 020136 6 0.790 0.746 0.705 0.630 0.501 0.507 0.456 0.410 0.370 0.335 0.303 0.275 0.250 0.227 0.207 0.133 2 0.000711 053053 0.453 0 4000354 0314 0279 0290 00198 017 0199 0.731 0677 0.627 0310 0.167 0.001 0.351 0.305 0.266 0233 0 201 0.179 0.157 0.139 0123 000 0645 039 030 04740361 030076 075 014 0167 0.144 0.125 0103 04 104 10 0.67606160 556 0.163 0.356 0.322 0.270 0.227 0.191 0.16 0.137 0.116 0,099 0.005 0.073 0.035 11 10 05 1527040350) 021 0237 0.1950 16201 000000000560005 12 0.615 0.557 0.197 0.997 0.319 0.237 0.200 0.168 0.137 0.112 0.092 0076 0.002 0.002 0.013 0.010 11 BLOOD 080002 001450116 DU00150040000 DO 14 0.377 0.505 0.412 0.3 100.263 0.205 0.160 0.125 0.0090076 0.002 0.019 0.09 0.02 0.0230009 15 0355 041 04170315 09 1010 0100 Ost D 0035 000 16 0.534 0.36 0.391 0.292 0.210 0.16 0.123 0.093 0.071 0.051 0012 0.033 0.025 0.019 0.01$0.005 12 0530436 0 D1014601000000005 06000 DOIS 01 000 10 0.19 0.16 0.330 0.250 0.10 0.130 0.005 0.009 0.051 0.035 0.025 0.02100160012 0.000 0.003 19 0415 0331 0 0 164 116 0000004001 0 00 00 00 00 00) 20 0:456 0.377 0312 0215 0.100.1010073 0031 or 006 00194 0010070005 21 0430359 090.190135 00054 0400310032001500 0.00 0.00 0.00 0.00 0.42201202750154 0.125 0.063005 003600600003 000 000 000 000 000 03060326 0110 011000002200150010 0.007 0.005 000 000 20 0,390 03100270155 0.102 0000 0.000010000000000000000 03709519600009 BE 0000000000000000000030001 O 03010220 0.13 000 00350080 0000001 2 2020135 000 0.015 OF 0.003 0.000000 0001 0330335010000000 16 0000 0.000000 20 6:31 0300:15 000 000 000 000 10 0111010000000000000000000 DSCN0000000000000 1000 EXHIBIT 10-2 Present Volue of on Annuity of 1 . (1+r) Perband 45 101 MI 191 184 2006 STT AT 1.87 30 1.00 1 0.962 2560 L 9 960 0.0090.193 0.577 0162 0347 05 0.000006 0794 0751 0.71 0.714 1647 1663 1506 1.528 1292 457 1424 1.392 1.361 124 2 1.86 SET E151 ESET 2.773 2.723 2673 2577 1.736 1690 2457 2402 3.170 3037 2.322 2246 2.174 2105 2012 1901 1923 1866 1516 1509 3.650 3.5.16 J. 3312 OCT 17 THE OCE TOT 6057 0 tot 3 ZS OCH 4212 3.993 50 2t 6 res 5076 TOT IT SET 3.433 3274 31272.901 2567 274526352332 2436 2033 3599 300 301 3326 3.167 3000 33852799 2643 2.168 4253 40393.812 603 3.416 32423003 2997 2502 2.26.) + 6.002 3756 ZS 43684564 3.200 370 6733 OIZO SOS 6 SEL SOL 2 6300 7.100 6247 6.710 57593328 61455650 01 TE 1113 09 11 72 3306 506 ACE O 9001 IC 6197 SCOTC 609 916 OLET 60 C 997 995 10 OC COST IT oc 69 SOFT TEST ITS BEZ ME SEES OLEO 9+ 206 CC 906 22 SCF16 20150905 99 o O FODS THIS 19TELEPE 1197 300599 $ 0009 LTE SC 569 961 520 HIT 1 100+ SICH 297 OSSESS THI 986 7.555 NO 13 2.96 1666 SES 7004 7.100 644 7.367 663 14 6656 TO 15 ODCO 5666 TIEG 101 CSS 76066511 10503 LIS 1162 13166 32659 18 10.935 ISS 169 OIL TO 11 11274 107 10.35 201 2350 0911 5001 6.5 5.6 5.1624.730 4357 40337313503 333 2106 6.373 374 372 4775405971133133295 686735.27345121192000 378 359 330 3394 0.330 3372 331644 HE40073.7993532 6625599 3.3545004110 23.5 2 1973 341 476473135153551 330 705 of 11.15 9.500 7.300 3500 DEL 9311 351471 11 HO LIO 36 1361 1316 IOLOL 955 OCT+F1109 1200 2500 12550 LE TO LE 1357 629201 402 403540013102 1556 313 3307 BOLT INC 156 1545 10 106 100 HLRES + + S 141 130 OS TOT DI 13-155311543334500 152 153 1553 GO 6 1114 11 CE TO 105 156 43160