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Net present value method The following data are accumulated by Geddes Company in evaluating the purchase of $160,000 of equipment, having a four-year useful
Net present value method The following data are accumulated by Geddes Company in evaluating the purchase of $160,000 of equipment, having a four-year useful life: Net Income Year 1 $43,500 Year 2 21,000 Year 3 Year 4 16,500 7,000 Net Cash Flow $83,500 61,000 56,500 47,000 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. X Open spreadsheet a. 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 b. 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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