Net Present Value Method The following data are accumulated by Reynolds Company in evaluating the purchase of $127,800 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 Year 2 Year 3 Year 4 $42,000 26,000 13,000 (1,000) $72,000 55,000 42,000 28,000 Present Value of $1 at Compound Interest 10% 12% 15% 0.943 0.909 0.8930.870 0.890 0.826 0.7970.756 0.840 0.751 0.7120.658 0.792 0.683 0.636 0.572 0.7470.621 0.567 0.497 0.705 0.564 0.507 0.432 0.665 0.513 0.452 0.376 0.627 0.467 0.4040.327 0.284 0.558 0.386 0.322 0.247 Year 2090 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 6% 4 9 0.592 0.424 0.361 10 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. Present value of net cash flow Less amount to be invested Net present value