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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?



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