The following data are accumulated by Geddes Company in evaluating the purchase of $120,000 of equipment, having a four-year useful fe Net Income Net Cash Flow Year 1 $49,500 $79,500 Year 2 29,000 59,000 Year 3 16,500 46,500 Year 4 6,500 36,500 This information has been collected in the Microsot Excel Online fle. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. K) open spreadsheet a. Auming that the desired rate of return is 15%, determine the net present value for the proposal. f required, round to the nearest dollac Net present value b. Would management be lky 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 returm of 15%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The following data are accumulated by Geddes Company in evaluating the purchase of $120,000 of equipment, having a four-year useful life:
Net Income
Net Cash Flow
Year 1
$49,500
$79,500
Year 2
29,000
59,000
Year 3
16,500
46,500
Year 4
6,500
36,500
This information has been collected in the Microsaft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
K) Open spreadsheet
a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. If required, round to the nearest dollac.
Net present value
b. Would management be likely to look with favor on the propesal?
the net present value indicates that the return on the proposal is
than the minimum desired rate of retum of 15%
Transcribed Image Text:The following data are accumulated by Geddes Company in evaluating the purchase of $120,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $49,500 $79,500 Year 2 29,000 59,000 Year 3 16,500 46,500 Year 4 6,500 36,500 This information has been collected in the Microsaft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. K) Open spreadsheet a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. If required, round to the nearest dollac. Net present value b. Would management be likely to look with favor on the propesal? the net present value indicates that the return on the proposal is than the minimum desired rate of retum of 15%
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