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. Ifrequired, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.Present value of net cash flow174,520 xAmount to be invested150,000 xNet present value24,520 xb. Would management be likely to look with favor on the proposal?Yes vbecause the net present value indicates that the return on the proposal is greater v than the minimum desired rate of return of 20%. The following data are accumulated by Geddes Company in evaluating the purchase of $99,000 of equipment, having a four-year useful life:Net IncomeNet Cash FlowYear 1$38,000$64,000Year 223,00049,000Year 311,00037,000Year 4(1,000)25,000Present Value of $1 at Compound InterestYear6%10%12%15%20%10.9430.9090.8930.8700.83320.8900.8260.7970.7560.69430.8400.7510.7120.6580.57940.7920.6830.6360.5720.48250.7470.6210.5670.4970.4020.7050.5640.5070.4320.33570.6650.5130.4520.3760.27980.6270.4670.4041.400.3270.23390.5920.4240.3610.2840.194100.5580.3860.3220.2470.162a. 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. Ifrequired, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.Present value of net cash flow174,520 xAmount to be invested150,000 x

The net present value method is used to evaluate the investment projects. We can evaluate the…

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, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Present value of net cash flow 174,520 x Amount to be invested 150,000 x Net present value 24,520 x b. Would management be likely to look with favor on the proposal? Yes v , because the net present value indicates that the return on the proposal is greater v than the minimum desired rate of return of 20%.

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, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value. Present value of net cash flow 174,520 x Amount to be invested 150,000 x Net present value 24,520 x b. Would management be likely to look with favor on the proposal? Yes v , because the net present value indicates that the return on the proposal is greater v than the minimum desired rate of return of 20%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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