Beyer Company is considering the purchase of an asset for $215,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year. Assume that Beyer requires a 12% return on its investments. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Year 1

Year 2

Year 3

Year 4

Year 5

Total

Net cash flows

$

77,000

$

54,000

$

82,000

$

172,000

$

38,000

$

423,000

a.	Compute the net present value of this investment.

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

b.

Should Beyer accept the investment?

	Yes
	No