The following data are accumulated by Paxton Company in evaluating the purchase of $135,200 of equipment, having a four-year useful life:
My Collection - Stations - Pando X CengageNOWv2 | Online teachin X course hero - Bing X Course Hero X + X C & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false to . . Ch. 26, Quiz B Net Present Value Method ? The following data are accumulated by Paxton Company in evaluating the purchase of $135,200 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $31,000 $53,000 Year 2 19,000 41,000 Year 3 9,000 31,000 Year 4 (1,000) 21,000 Present Value of $1 at Compound Interest Year 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 N 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 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 CO 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 Type here to search O X 7:21 PM 91 F ~ - 0 0 ( () 8/9/2021My Collection - Stations - Pando X CengageNOWv2 | Online teachin X course hero - Bing X Course Hero X + X C & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false to . . Ch. 26, Quiz B 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 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 Co 0.627 0.467 0.404 0.327 0.233 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 10%, 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 b. Would management be likely to look with favor on the proposal? OneDrive X Screenshot saved The net present value indicates that the return on the proposal is than the minimum desired rate of return of 10%. The screenshot was added to your OneDrive. Type here to search O 7:21 PM 91OF 8/9/2021