Question
5. EX.12.07.EXCEL.ALGO eBook Show Me How Office 365 Net present value method The following data are accumulated by Geddes Company in evaluating the purchase of
5. EX.12.07.EXCEL.ALGO
eBook
Show Me How
Office 365
Net present value method
The following data are accumulated by Geddes Company in evaluating the purchase of $140,000 of equipment, having a four-year useful life:
| Net Income | Net Cash Flow | |||
| Year 1 | $46,000 | $81,000 | ||
| Year 2 | 26,500 | 61,500 | ||
| Year 3 | 19,000 | 54,000 | ||
| Year 4 | 5,000 | 40,000 | ||
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
- Assuming that the desired rate of return is 6%, determine the net present value for the proposal. If required, round to the nearest dollar.
Net present value $ - Would management be likely to look with favor on the proposal?
, the net present value indicates that the return on the proposal is than the minimum desired rate of return of 6%.
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Managerial Accounting
Authors: Karen Wilken Braun, Wendy M. Tietz
2nd Custom Edition
1269396803, 978-1269396806
