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 10% 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 $60,000  $40,000  $70,000  $125,000  $35,000  $330,000   a. Compute the net present value of this investment. (Round your answers to the nearest whole dollar.)    b. Should Beyer accept the investment?  YesNo

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Asked Apr 29, 2019
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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 10% 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   $ 60,000     $ 40,000     $ 70,000     $ 125,000     $ 35,000     $ 330,000  
 

 
a. Compute the net present value of this investment. (Round your answers to the nearest whole dollar.)
  

 

 
b. Should Beyer accept the investment?
  
  • Yes
  • No

 

 
 
 
 
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Expert Answer

Step 1

 

A.

Compute the Present value of net cash flows:

 

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Step 2

Calculate net present value of this investment:

...

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