Net Present Value Method The following data are accumulated by Mad Hatter Company in evaluating the purchase of $161,000 of equipment; having a four-year useful life with no residual value: Present Value of $1 at Compound Interest a. Assuming that the desired rate of return is 6%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. If required, use the minus sign to indicate a negative net present value. b. Would management be likely to look with favor on the proposal