Net Income Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $184,000 of equipment, having a four-year u Net Cash Flow Year 1 $40,000 $67,000 Year 2 24,000 52,000 Year 3 12,000 39,000 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 0.507 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 6%, determine the net present value for the proposal. Use the table of the present value of Present value of net cash flow Amount to be invested Net present value 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 less than the minimum desired rate of No Show Me How COW 2Osinaching Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $184,000 of equipment, having a four-year useful the Net Income Net Cash Flow Year 1 $40,000 $67,000 Year 2 24,000 52,000 Year 3 12,000 39,000 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 S 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.335 0.432 7 0.665 0.513 0,452 0.376 0.279 8 0.233 0.627 0.404 9 0.592 0.194 0.361 0.284 0.558 0.162 0.247 0.467 0.327 0.424 0.386 10 0.322 a. Assuming that the desired rate of return is 6%, determine the net present value for the proposal Use the table of the present at of st presenteret er der Present value of net cash flow X Amount to be invested X the desired rate frumos Net present value b. Would management be likely to look with favor on the proposal NO because the net present value indicates that the return on the proposal is less