The following data are accumulated by Reynolds Company in evaluating the purchase of 104,000 of equipment, having a four-year useful life: Year 1 Net Income: 38,000 Net Cash Flow 64,000 Year 2 Net Income 23,000 Net Cash Flow 49,000 Year 3 Net Income 11,000 Net Cash Flow 37,000 Year 4 Net Income -1000 Net Cash Flow 25,000 1. On exercise 10-7, what is the net present value of the proposal? $55,680 $27,370 ($5,550) ($7,700) 2. On exercise 10-7, would management be likely to look with favor on the proposal? Yes No