It depends how close you want to be to the nuance. If you just want to acknowledge, any of the possibilities mentioned so far is fine.
But if you really want to nail it down, "sounds good" means: "I believe it's a good idea", hence "I do not see any issue".
The closest translation that comes to my mind is:
Ça me paraît bien.
or, as Google Translate correctly suggested:
Ça m'a l'air bien.
Ça peut aller.
No, it is not formal, because "ça" belongs more to spoken language. To be formal it would have to be:
Cela me paraît bien.
Cela m'a l'air bien.
So, Google Translate had it right.