Net Present Value The following data are accumulated by Geddes Company in evaluating the purchase of $134,600 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $39,000 $66,000 Year 2 24,000 51,000 Year 3 11,000 38,000 Year 4 (1,000) 26,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.335 0.507 0.432 0.376 7 0.513 0.665 0.279 0.452 8 0.627 0.233 0.467 0.404 0.327 0.592 0.424 9 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Check My Work Save and Exit Submit Assignment for Grading All work saved 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 a. Assuming that the desired rate of return is 12%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Present value of net cash flow Amount to be invested Net present value than the minimum 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 desired rate of return of 12%. Previous Next > Check My Work Save and Exit Submit Assignment for Grading All work saved