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The following data are accumulated by Reynolds Company in evaluating the purchase of $99,000 of equipment, having a four-year useful life: Assuming that the desired
The following data are accumulated by Reynolds Company in evaluating the purchase of $99,000 of equipment, having a four-year useful life: 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, round to the nearest dollar. Present value of net cash flow $ Less amount to be invested $ Net present value $ Would management be likely to look with favor on the proposal? The net present value indicates that the return on the proposal is than the minimum desired rate of 20%
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