Beyer Company is considering the purchase of an asset for $180,000. 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 1Year 2Year 3Year 4Year 5TotalNet cash flows $82,000 $56,000 $74,000 $134,000 $50,000 $396,000
a. Compute the net present value of this investment.
b. Should Beyer accept the investment?