The following data are accumulated by Dillon Company in evaluating the purchase of $39,600 of equipment, having a four year useful life. Net Income Net Cash Flow Year 1 $4100 $14,000 Year 2 $8,100 $18,000 Year 3 $7,100 $17,000 Year 4 $2,100 $12,000

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 15%, determine the net present value for the proposal. (If required, round to the nearest dollar). Use the table of the present value of %1 presented above. Present Value of net cash flow? Less amount to be invested? Net present value?

b. Would management be likely to look with favor on the proposal?