The following data are accumulated by Paxton Company in evaluating the purchase of $129,200 of equipment, having a four-year useful life:

Net Income

Net Cash Flow

Year 1

$43,000

$73,000

Year 2

26,000

56,000

Year 3

13,000

42,000

Year 4

(1,000)

28,000

Present Value of $1 at Compound Interest

Year6%10%12%15%20%

10.9430.9090.8930.8700.833

20.8900.8260.7970.7560.694

30.8400.7510.7120.6580.579

40.7920.6830.6360.5720.482

50.7470.6210.5670.4970.402

60.7050.5640.5070.4320.335

70.6650.5130.4520.3760.279

80.6270.4670.4040.3270.233

90.5920.4240.3610.2840.194

100.5580.3860.3220.2470.162

a.Assuming that the desired rate of return is 20%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, use the minus sign to indicate a negative net present value.

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