The following data are accumulated by Geddes Company in evaluating the purchase of $140,000 of equipment, having a four-year useful life: Net Income Net Cash Flow $77,000 61,000 54,500 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. Year 1 Year 2 Year 3 Year 4 ✔, the net present value indicates that the return on the proposal is greater $42,000 26,000 19,500 4,500 Open spreadsheet a. Assuming that the desired rate of return is 20%, determine the net present value for the proposal. If required, round to the nearest dollar. Net present value 17,116 ✔ b. Would management be likely to look with favor on the proposal? Yes ✔than the minimum desired rate of return of 20%.

The following data are accumulated by Geddes Company in evaluating the purchase of $140,000 of equipment, having a four-year useful life: Net Income Net Cash Flow $77,000 61,000 54,500 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. Year 1 Year 2 Year 3 Year 4 ✔, the net present value indicates that the return on the proposal is greater $42,000 26,000 19,500 4,500 Open spreadsheet a. Assuming that the desired rate of return is 20%, determine the net present value for the proposal. If required, round to the nearest dollar. Net present value 17,116 ✔ b. Would management be likely to look with favor on the proposal? Yes ✔than the minimum desired rate of return of 20%.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 14M

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Net present value method 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 $46,000 $78,500 Year 2 29,000 61,500 Year 3 11,000 43,500 Year 4 5,000 37,500 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. Assuming that the desired rate of return is 10%, determine the net present value for the proposal. If required, round to the nearest dollar. Net present value $ 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 10%.
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Instruction: Use the table below to acquire information and answer the following questions. Please do not use signs like Rs., $, % etc in your answer. If you calculate percentage as 10.23% than answer must write like 10.23 only (do not write like 10.23% or 0.1023) Year 0 1 2 3 4 Cash flows −$950 $525 $485 $445 $405 Ms ABC is considering an opportunity of a new investment that has the following cash flow and weighted average cos of capital is 13 percent. What is the project's discounted payback in years? Answer should correct up to 2 decimal places. Ms ABC is considering an opportunity of a new investment that has the following cash flow and weighted average cos of capital is 13 percent. What is the project's net present value? Ms ABC is considering an opportunity of a new investment that has the following cash flow and weighted average cos of capital is 13 percent. What is the project's profitability index? Answer should correct up to 2…
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