Net Present Value Method The following data are accumulated by Geddes Company in evaluating the purchase of $124,700 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 Year 2 Year 3 $34,000 $58,000 21,000 45,000 10,000 34,000 (1,000) 23,000 Present Value of $1 at Compound Interest Year 4 Year 6% 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 0.792 0.683 0.747 0.705 0.665 0.627 0.592 0.558 0.621 0.564 0.513 0.467 0.424 0.386 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.579 0.482 0.402 0.335 0.279 0.233 0.194 10 0.162 for the proposal Use the table of the present value of $1 presented above. If requred, round to the a. Assuming that the desired rate of return is 20%, determine the net present nearest dollar Present value of net cash flow Amount to be invested Net present value b. Would management belely to look with favor on the proposal because the net present value indicates that the return on the proposal is than the m m m desired rate of return of 20%