Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $118,000 of equipment , having a four year useful : Net Income Net Cash Flow Yeart $34,000 $58,000 Year 2 Year 3 10,000 34,000 Year 4 (1,000) 23,000 Present Value of $1 at Compound Interest Year % 10% 12 15 % 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0,665 0.513 0.452 0.376 0.229 0.627 0.467 0.404 0.424 0.36 0.194 20 0.55 0.386 0.322 0.247 0.162 2 0.572 a. Assuming that the desired rate 20 , determine propo e of the of required, round ta the , use the sign to indicate a negative net

eBook Show Me How Calculator Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $118,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $34,000 $58,000 Year 2 21,000 45,000 Year 3 10,000 34,000 Year 4 (1,000) 23,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 B 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 1 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 si 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 Check My Work 2 more Check My Work uses remaining Previous Next