Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the following data are accumulated by geddes compa

The following data are accumulated by Geddes Company in evaluating the purchase of $130,000 of...

60.1K

Verified Solution

Question

Accounting

The following data are accumulated by Geddes Company in evaluating the purchase of $130,000 of equipment, having a four-year useful life:

Net Income Net Cash Flow
Year 1 $49,000 $81,500
Year 2 24,500 57,000
Year 3 13,000 45,500
Year 4 7,000 39,500

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

  1. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. If required, round to the nearest dollar.

    Net present value $

  2. Would management be likely to look with favor on the proposal?

    Yes , the net present value indicates that the return on the proposal is greater than the minimum desired rate of return of 15%.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

3. [13 marks] A company is interested in forecasting demand for a product. They have reason...

Statistics
Q

Honey Ltd, a New Zealand company, has sold US$150,000 of products to the US, to receive...

Accounting
Q

Match each of the following sets of measurements with the number of unique triangles that...

Geometry
Q

Rita have a decorative M&M's dispenser in her house. When a guest activates the dispenser,...

Basic Math
Q

2x 2 4 xy 4 3 x y2 1 Find lim 2x2 2 4 lim...

Calculus
Q

Glew Corporation has provided the following information: Cost per Unit Cost per Period Direct materials...

Accounting
Q

The selling and administrative expense budget of Gullette Corporation is based on the number of...

Accounting
Q

Waterway Shutters has the following inventory information. Nov. 1 Inventory 60 units @ $7.008 Purchase...

Accounting
Q

Based on the MFRS 101 , MFRS 107, MFRS 118, MFRS 124, AND MFRS 9...

Accounting
Q

Boeing assembles its wide body aircrafts in the U.S. and deliver them globally. This exemplifies......

Finance
Q

Notes Receivable. On December 31, 2020 Kaplin Inc. provided service to Sports Unlimited, accepting a...

Accounting
Q

Paul Company purchased 80% of the shares of Sara Inc. on December 31, 20X3, for...

Finance