In: Finance
Beyer Company is considering the purchase of an asset for
$245,000. It is expected to produce the following net cash flows.
The cash flows occur evenly within each year. Assume that Beyer
requires a 12% return on its investments. (PV of $1, FV of $1, PVA
of $1, and FVA of $1) (Use appropriate factor(s) from the
tables provided.)
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Total | |||||||||||||||||||
Net cash flows | $ | 68,000 | $ | 45,000 | $ | 85,000 | $ | 143,000 | $ | 35,000 | $ | 376,000 | ||||||||||||
a. Compute the net present value of this
investment.
b. Should Beyer accept the investment?
Compute the net present value of this investment. (Round your answers to the nearest whole dollar.)
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