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Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $ 1 2 9 , 8 0 0
Net Present Value Method
The following data are accumulated by Geddes Company in evaluating the purchase of $ of equipment, having
a fouryear useful life:
Present Value of $ at Compound Interest
a Assuming that the desired rate of return is determine the net present value for the proposal. Use the table of
the present value of $ presented above. If required, round to the nearest dollar.
b Would management be likely to look with favor on the proposal?
because the net present value indicates that the return on the proposal is than the
minimum desired rate of return of
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