Thank you for checking. Net Present Value MethodThe following data are accumulated by Paxton Company in evaluating the purchase of $156,100 of equipment, having a four-year useful life:Net IncomeNet Cash FlowYear 1$40,000$67,000Year 224,00052,000Year 312,00039,000Year 4(1,000)26,000Present Value of $1 at Compound InterestYear6%10%12%15%20%10.9430.9090.8930.8700.83320.8900.8260.7970.7560.6940.8400.7510.7120.6580.57940.7920.6830.6360.5720.4820.7470.6210.5670.4970.4026.0.7050.5640.5070.4320.33570.6650.5130.4520.3760.2798.0.6270.4670.4040.3270.2339.0.5920.4240.3610.2840.194100.5580.3860.3220.2470.162a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. Use the table of the present value of $1 presented above. Ifrequired, round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.Present value of net cash flowAmount to be investedNet present value2$

In this we have to calculate present value of cash flow and we have to calculate difference between…

ng data are accumulated by Paxton Company in evaluating the purchase of $156,100 of equipment, having a f Net Income Net Cash Flow $40,000 $67,000 24,000 52,000 12,000 39,000 (1,000) 26,000 resent Value of $1 at Compound Interest 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 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.194 0.558 0.386 0.322 0.247 0.162

ng data are accumulated by Paxton Company in evaluating the purchase of $156,100 of equipment, having a f Net Income Net Cash Flow $40,000 $67,000 24,000 52,000 12,000 39,000 (1,000) 26,000 resent Value of $1 at Compound Interest 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 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.194 0.558 0.386 0.322 0.247 0.162

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter7: Fixed Assets, Natural Resources, And Intangible Assets

Section: Chapter Questions

Problem 7.3.3MBA

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