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3) XYZ Company is trying to decide if they should purchase equipment costing $45,000, having...

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Accounting

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3) XYZ Company is trying to decide if they should purchase equipment costing $45,000, having a useful life of four years. The Net Income and Net Cash Flow for this project is as follows: Net Income $5,000 Year 1 Year 2 Year 3 Year 4 Net Cash Flow $17,000 $20,000 $15,000 $10,000 $7,000 $6,000 $4,000 Instructions: a) Assuming a desired rate of return of 12%, calculate the net present value for this proposal. Use the tables in appendix A of your textbook. b) Based on your answer to part (a), should the company buy the equipment? (10 points)

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