Zachary Delivery is a small company that transports business packages between New York and Chicago. It operates 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 $5.4 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 $720,000. 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 $90,000. Operating the vans will require additional working capital of $32,000, 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 $155,000 Year 2 $314,000 Year 3 $409,000 Year 4 $439,000 The large trucks are expected to cost $800,000 and to have a four-year useful life and a $81,000 salvage value. In addition to the purchase price of the trucks, up front training costs are expected to amount to $16.000. Zachary Delivery's management has established a 16 percent desired rate of return. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a.&b. Determine the net present value and present value index for each investment alternative. (Enter answers in whole dollar, not in million. Negative amounts should be indicated by a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) Purchase of City Purchase of a. Net Present Value (NPV) b. Present Value Index (PVI) TABLE 1 PRESENT VALUE OF $1 n 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.862069 0.833333 2 0.924556 0.907029 0.889996 0.873439 0.857339 0.841680 0.826446 0.797194 0.769468 0.743163 0.694444 3 0.888996 0.863838 0.839619 0.816298 0.793832 0.772183 0.751315 0.711780 0.674972 0.640658 0,578704 4 0.854804 0.822702 0.792094 0762895 0735030 0.708425 0.683013 0,635518 0.592080 0.552291 0.482253 5 0.821927 0.783526 0.747258 0.712986 0.680583 0.649931 0.620921 0.567427 0.519369 0.476113 0.401878 6 0.790315 0.746215 0.7049610666342 0.630170 0.596267 0.564474 0.506631 0.455587 0.410442 0.334898 7 0.759918 0.710681 0.665057 0.622750 0.583490 0.547034 0.513158 0.452349 0.399637 0.353830 0.279082 8 0.730690 0.6768390627412 0.582009 0.540269 0.501866 0.466507 0.403883 0.350559 0.305025 0.232568 9 0702587 0.644609 0.591898 0.543934 0.500249 0.460428 0.424098 0.360610 0.307508 0.262953 0.193807 10 0.675564 0.613913 0.558395 0.508349 0.463193 0.422411 0.385543 0.321973 0.269744 0.226684 0.161506 11 0.649581 0.584679 0.526788 0.475093 0.428883 0.387533 0.350494 0.287476 0.236617 0.195417 0.134588 12 0.624597 0.556837 0.496969 0.444012 0.397114 0.355535 0.318631 0.256675 0.2075590.168463 0.112157 13 0600574 0.530321 0.4688390.414964 0.367698 0.326179 0.289664 0.229174 0.182069 0.145227 0.093464 14 0.577475 0.505068 0.442301 0.387817 0.340461 0.299246 0.263331 0.204620 0.159710 0.125195 0.077887 15 0.555265 0.481017 0.417265 0.362446 0.315242 0.274538 0.239392 0.182696 0.140096 0.107927 0.064905 16 0.533908 0.458112 0.393646 0.338735 0.291890 0.251870 0.217629 0.163122 0.122892 0.093041 0.054088 17 0.513373 0.436297 0.371364 0.316574 0270269 0231073 0.197845 0.145644 0.107800 0.080207 0.045073 18 0.493628 0.415521 0.350344 0.295864 0.250249 0.211994 0.179859 0.130040 0.094561 0.069144 0.037561 19 0474642 0.395734 0.330513 0.276508 0.231712 0.194490 0163508 0116107 0.082948 0.059607 0.031301 20 0.456387 0.376889 0.311805 0.258419 0.214548 0.1784310.148644 0.103667 0.072762 0.051385 0.026084 TABLE 2 PRESENT VALUE OF AN ANNUITY OF $1 5% 6% 8% 9% 10% 12% 14% 16% 20% 1 0.961538 0.952381 0.943396 0.934579 0.925926 0.917431 0.909091 0.892857 0.877193 0.8620690.833333 2 1886095 1859410 1.8333931.808018 1783265 1.759111 1735537 1690051 1.646661 1.605232 1.527778 3 2.775091 2.723248 2.6730122.624316 2.577097 2.531295 2.486852 2.401831 2.321632 2.245890 2.106481 4 3.629895 3.545951 3.465106 3.387211 3.312127 3.239720 3.169865 3.037349 2.913712 2.798181 2.588735 5 4.451822 4.329477 4.212364 4.100197 3.992710 3.889651 3.790787 3.604776 3.433081 3.274294 2.990612 6 5242137 5.075692 4.917324 4.766540 4.622880 4.485919 4.355261 4.111407 3.888668 3.684736 3.325510 7 6.002055 57863735.582381 5.389289 5.206370 5.0329534868419 4.563757 4.288305 4.038565 3.604592 8 6.732745 6.463213 6.209794 5.97129957466395534819 5.334926 4.967640 4.638864 4.343591 3.837160 9 7.435332 7107822 6.801692 6.515232 6.246888 5.995247 5759024 5.328250 4.946372 4.606544 4.030967 10 8.110896 7721735 7.360087 7023582 6.710081 6.417658 6144567 5.650223 5.216116 4.833227 4192472 11 8.760477 8.306414 7.8868757498674 7138964 6.805191 6.495061 5.937699 5.452733 5.028644 4.327060 12 9.385074 8863252 8.383844 7942686 7536078 7160725 6.813692 6.194374 5.660292 5.197107 4.439217 13 9.985648 9.393573 8.852683 8.3576517903776 7486904 7103356 6.423548 5.842362 5.342334 4.532681 14 10.563123 9.898641 9.294984 8745468 8.244237 7786150 7.366687 6.628168 6.002072 5.467529 4.610567 15 11118387 10.379658 9.712249 9.107914 8.559479 8.060688 7606080 6.810864 6142168 5.575456 4.675473 16 11652296 10.837770 10.105895 9.446649 8.851369 8.312558 7823709 6.973986 6.265060 5.668497 4.729561 17 12.165669 11.274066 10.477260 9.7632239121638 8.543631 8.021553 7119630 6.372859 5.748704 4.774634 18 12.659297 11689587 10.827603 10.059087 9.371887 8.755625 8.201412 7249670 6.467420 5.817848 4.812195 1913133939 12 085321 11158116 10.335595 9.603599 8.905115 8.364920 7365777 6.550369 5.877455 4843496 20 13.590326 12.462210 11.469921 10.594014 9.818147 9128546 2.513564 74694446623131 5.928841 4.869580