The following data are accumulated by Geddes Company in evaluating the purchase of $130,000 of equipment, having
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Question:
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 | $49,000 | $81,500 | ||
Year 2 | 24,500 | 57,000 | ||
Year 3 | 13,000 | 45,500 | ||
Year 4 | 7,000 | 39,500 |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
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- Assuming that the desired rate of return is 15%, determine the net present value for the proposal. If required, round to the nearest dollar.
Net present value $ - Would management be likely to look with favor on the proposal?
Related Book For
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
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