Net Present Value Method The following data are accumulated by Lingle Company in evaluating the purchase of $129,200 of equipment, having a 4-year useful life: Net Cash Flow Year 1 Year 2 Year 3 Year 4 Year 1 24 3 4 5 6 7 8 9 10 $38,000 23,000 11,000 (1,000) Present Value of $1 at Compound Interest 6% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 Net Income 0.558 10% 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 $64,000 49,000 37,000 25,000 0.247 20% 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162

Net Present Value Method The following data are accumulated by Ungle Company in evaluating the purchase of $129,200 of equipment, having a 4 -year useful life: a. Assuming that the desired rate of return is 2096 , eetermine the nec present value for the proposal. Use the table of the present value of s1 brestented abave. If required, round to the nearest dollar. If requird, use the minus sign to indicate a negative net present value. b. Would managemeot be likely to look with favor on the proposal? The net present value indicates that the retum on the proposal is than the minimum desired rate of retum of 20%