Net present value method The following data are accumulated by Geddes Company in evaluating the purchase of $130,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $43,500 $76,000 Year 2 28,500 61,000 Year 3 15,000 47,500 Year 4 2,000 34,500 This information has been collected in the Microsoft Excel Online le. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. ) 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 $E X b. Would management be likely to look with favor on the proposal? lYes ' V , the net present value indicates that the return on the proposal is greater " V than the minimum desired rate of return of 6%. Feedback ' V Check My Work a. The net present value method compares the amount to be invested with the present value of the net cash inows