Zachary Delivery is a small company that transports business packages between New York and Chicago. It operates a fleet of small vans that moves packages to and from a central depot within each city and uses a common carrier to deliver the packages between the depots in the two cities. Zachary Delivery recently acquired approximately $5.6 million of cash capital from its owners, and its president, George Hay, is trying to identify the most profitable way to invest these funds, Todd Payne, the company's operations manager, believes that the money should be used to expand the fleet of city vans at a cost of $730,000. He argues that more vans 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 $280,000 per year. The additional vans are expected to have an average useful life of four years and a combined salvage value of $103,000, Operating the vans will require additional working capital of $46,000, which will be recovered at the end of the fourth year. In contrast, Oscar Vance, the company's chief accountant, believes that the funds should be used to purchase large trucks to deliver the packages between the depots in the two cities. The conversion process would produce continuing improvement in operating savings and reduce cash outflows as follows. Year 1 $152,000 Year 2 $317.000 Year 3 $406,000 Year 4 5430,000 The large trucks are expected to cost $810,000 and to have a four-year useful life and a $77,000 salvage value. In addition to the purchase price of the trucks, up-front training costs are expected to amount to $19,000. Zachary Delivery's management hos established o 14 percent desired rate of return. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required 0.&b. Determine the net present value and present value index for each investment alternative. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answer in whole dollars and not in millions.) Purchase of City Vans Purchase of Trucks a. Not Present Value (NPV) b. Present Value Index (PVI) TABLE 1 PRESENT VALUE OF $1 1 2 3 4 5 6 7 S 10 49 5% 69 75 98 10% 12 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0924556 0.907029 0.889996 0.873439 0.857339 0.341680 0.526446 0.797194 0.885996 0.863338 0.839619 0.816295 0.793832 0.772153 0751315 0.711750 0.854504 0.822702 0.792094 0.762895 0.735030 0.708425 0.683013 0.635515 0.821927 0.783526 0.747255 0.712936 0.680583 0.649931 0.620921 0.567427 0.790315 0.746215 0.704961 0.666342 0.630170 0.596267 0.564474 0.506631 0.759915 0.710631 0.665057 0.622750 0.583490 0.547034 0.513155 0.452349 0.730690 0.676839 0.627412 0.582009 0.540269 0.501366 0.466507 0.403883 0.702587 0.614609 0.591395 0.543934 0.500249 0.460428 0.424095 0.360610 0.675564 0.613913 0 558395 0.505349 0.463193 0.422411 0.385543 0.321973 0.649551 0.584679 0.526788 0.475093 0.428883 0.387533 0.350194 0.287476 0.624597 0.556837 0.496969 0.444012 0.397114 0.355535 0.315631 0.256675 0.600574 0.530321 0.468539 0.414964 0.367698 0.326179 0.299664 0.229174 0.577475 0.S0506S 0.442301 0.387817 0.340461 0.299246 0.263331 0.201620 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 0.239392 0.182696 0.533903 0.458112 0.393646 0.338735 0.291990 0.251570 0.217629 0.163122 0.513373 0.436297 0.371364 0.316574 0.270269 0.231073 0.197845 0.145644 0.493628 0.415521 0.350344 0.295864 0.250249 0.21 1994 0 179859 0.130040 0.474642 0.395734 0.330513 0.27650S 0.231712 0.194490 0.163505 0.116107 0.456387 0.376859 0311505 0.258419 0.214548 0.178431 0.1456-14 0.103667 14% 16% 0.877193 0.862069 0.769468 0.743163 0.674972 0.640655 0.592050 0.552291 0.519369 0.476113 0.455557 0.410442 0.399637 0.353530 0.350559 0.305025 0.30750S 0.262953 0.269744 0.226684 0.236617 0.195417 0.207559 0.168463 0.182069 0.145227 0.159710 0.125195 0.140096 0.107927 0.122592 0.093041 0.107800 0.030207 0.094561 0.069144 0.032948 0.059607 0.072762 0.051385 20% 0.833333 0.694444 0.578704 0.482253 0.401878 0.334395 0.279052 0.232568 0.193807 0.161506 0.134558 0.112157 0.093464 0.077887 0.064905 0.0540SS 0.045073 0.037561 0.031301 0.026094 11 12 13 14 15 16 17 18 19 20 TABLE 2 PRESENT VALUE OF AN ANNUITY OF 51 1 2 3 -1 3 0 7 8 9 10 11 12 13 14 IS 16 17 IS 43 0.961535 1.580095 2.775091 3.629595 4,451822 5.242137 6.002055 6.732745 7435332 3.110996 3.760477 9.335074 9.985615 10.563123 11.118357 11.652296 12.165609 12.659297 13.133939 13. 590326 5 0.952351 1 859310 2.723245 3.545951 4329477 5.075692 5.756373 6.463213 7.107822 7.721735 3300414 3.563252 9.393573 9.595641 10.379658 10.837770 11:274066 11 609557 12.033321 12.462210 6 0943396 1.533393 2673012 3.465106 4212364 4917324 5.582381 6 209794 6,501692 7.360057 3336575 3383344 8.852633 9.294934 9.712249 10.105895 10.477260 10.527603 11.158116 11:469921 7 85 99 109 12% 149 16 203 0934579 0925926 0.917431 0909091 0.592557 0.877193 0.362069 0.833333 1.SOSOIS 1.783265 L759111 1.735537 1.690051 1.646661 1.605232 1.527778 2.624316 2.577097 2.531295 2.496852 2.401831 23216322245590 2.106481 3.357211 3.312127 239720 3.169565 3.037349 2913712 2.793151 2.583735 4.100197 3.992710 3.599651 3.790787 3.604776 3.433031 3.27429.4 2.990612 4.766540 4.622380 4.485919 4355261 1.111107 3.SS5665 3.634736 3.325510 5.369289 3.206370 5.032953 4.863419 4.363757 4.253305 4,035565 3.604592 5.971299 3.746639 5.534519 3.334926 4.967610 4.635964 4313591 3.837160 6 515232 6.246593 3.995247 5. 759024 5.328250 4916372 4.606544 4 030967 7.023592 6.710051 6.417655 6.144567 5.650223 3.216116 4.333227 4.192472 7.495674 7.135964 6.805191 6.195061 5.937699 5452733 5.028614 4.327060 7.942636 7.5360737.100725 6.813692 6.194374 5660292 5.197107 4439217 3.357651 7.903776 7486904 7.103356 6.423545 5.542362 5342334 4532601 8.745463 3244237 7.756150 7.366607 6.628168 0.002072 5.467529 4.610567 9.107914 S 559479 S060686 7.606060 6.510364 6.142165 5.575456 4,675473 9.446619 9.851369 8.312553 7.523709 6.973936 6 265060 5.663497 4.729561 9.763223 9,12163S 8.543631 3.021553 7.119630 6.372859 5.748704 4.774634 10.059057 9.371587 8.755625 S.201412 7.249670 6.467420 5.817345 4.812193 10.335595 9.603.599 5.905115 3 364920 7.365777 6350369 5.577455 4.343.196 10 594014 9.515147 9.128546 351356+ 74694446623131 5.925941 4.369550 19 20