Belvin Company will earn $150,000 revenue as payment for a three-year consulting engagement.

Belvin will report the revenue as taxable income in the year the cash is received. Its marginal tax rate is 25%, and it uses an 8% discount rate.

(1) Compute the NPV of the revenue if Belvin will receive $30,000 cash immediately (year 0), $40,000 cash next year (year 1) and $80,000 cash the following year (year 2).

(2) Unfortunately, something comes up and the customer doesn't have the funds readily available to pay Belvin anything immediately. However, the customer has promised to pay $100,000 cash next year (year 1) and $50,000 cash the following year (year 2). Compute the NPV of the revenue under these circumstances.

(3) Should Belvin accept the new terms? Justify your answer.