Net Present Value Method The following data are accumulated by Grddes Company in evaluating the purchase of $107,000 of equipment, having a four-yeat useful life: Net Income Net Cash Flow Year 1 537,000 563,000 Year 2 23,000 49,000 Year 3 11,000 37,000 Year 4 (1,000) 25,000 Present Value of $1 at Compound Interest Year 696 10% 129 20% 1 0.945 0.900 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.6336 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 0.705 0.507 0.432 7 0.513 0.376 0.279 0.627 0467 0.404 0.327 0.592 0.424 0.361 0.284 0.194 10 0.36 0.322 0.247 0.162 4 015 0.233 F C Year 1 2 3 4 Present Value of $1 at Compound Interest 10% 12% 15% 2016 0.943 0.909 0.893 0.870 0.830 0.800 0.826 0.797 0.750 0.694 0.840 0.751 0.712 0,658 0.579 0.792 0.680 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.102 0.705 0,564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.004 0.327 0.233 0.592 0.424 0,361 0.284 0.194 0.550 0,366 0.322 0.247 0.162 5 6 7 8 9 10 .. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use the table of the present value of 51 presented above. If required, round to the nearest dollar. If required, use the minussion 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 proposals than the minimum desired rate of return of 155