Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $130,200 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 2 Year $36,000 561.000 22,000 47.000 11.000 35,000 (1.000) 0.000 Present Value of $1 at Compound Interest 6% 10% 12% 15% 20% 0.943 0.909 0.93 0.70 0.833 0.00 0.626 0.797 0.756 0.64 0.540 0.75 0 .712 0.6 0.792 0.680 0.636 0.572 0.77 0.621 0.567 0.497 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.404 0.32% 0.233 0.424 361 0.154 0.36 0.322 0.247 0.162 8 0558 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 Amount to be invested Net present value b. Would management be likely to look with favor on the proposal? , because the net present value indicates that the return on the proposal is than the minimum desired rate of return of 20%