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In: AccountingNet Present Value MethodThe following data are accumulated by Paxton Company inevaluating the purchase...Net Present Value MethodThe following data are accumulated by Paxton Company inevaluating the purchase of $129,200 of equipment, having afour-year useful life:Net IncomeNet Cash FlowYear 1$38,000$64,000Year 223,00049,000Year 311,00037,000Year 4(1,000)25,000Present Value of $1 at CompoundInterestYear6%10%12%15%20%10.9430.9090.8930.8700.83320.8900.8260.7970.7560.69430.8400.7510.7120.6580.57940.7920.6830.6360.5720.48250.7470.6210.5670.4970.40260.7050.5640.5070.4320.33570.6650.5130.4520.3760.27980.6270.4670.4040.3270.23390.5920.4240.3610.2840.194100.5580.3860.3220.2470.162a. Assuming that the desired rate of return is20%, determine the net present value for the proposal. Use thetable of the present value of $1 presented above. If required,round to the nearest dollar. If required, use the minus sign toindicate a negative net present value.Present value of net cash flow$Amount to be invested$Net present value$b. Would management be likely to look withfavor on the proposal?YesNoThe net present value indicates that the return on the proposal isgreaterlessthan the minimum desired rate of return of 20%.