Net Prasant Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $129,700 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $30,000 $51,000 Year 2 18,000 39,000 Year 3 9,000 30,000 Year 4 (1,000) 20,000 Present Value of $1 at Compound Interest Year 6% 10% 12% % 15% 20% 1 0.043 0.900 0.893 0.870 0.833 2 0.890 0.826 0.797 0.750 0.594 3 0.840 0.251 0.712 0.658 4 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 0.705 0.561 0.507 0.432 7 7 0.665 0.513 0 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.223 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 :) a. Assurning that the desired rate of return is 10%, determine the nel present value for the proposal. Use the table or the present value of si presented above. If required, round to the nearest dollar. I required, use the minus sign to indicate a negative nel present value. Present value of net cash flow Amount to be invested Net present value b. Would management be likely to look with faver on the proposal? The net present value indicates that the return on the proposal is than the minimum desired rate of return of 109