2.

Beyer Company is considering the purchase of an asset for $230,000. 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		$	70,000			$	44,000			$	76,000			$	152,000			$	36,000			$	378,000

a. Compute the net present value of this investment. b. Should Beyer accept the investment?

Year	Net Cash Flows	Present Value of 1 at 12%	Present Value of Net Cash Flows
1
2
3
4
5
Totals	$0		$0
Amount invested
Net present value			$0