Beyer Company is considering the purchase of an asset for $195,000. 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		$	81,000			$	57,000			$	97,000			$	140,000			$	57,000			$	432,000

a. Compute the net present value of this investment.

A machine can be purchased for $278,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied using a five-year life and a zero salvage value.

	Year 1				Year 2				Year 3				Year 4				Year 5
Net income		$	23,000			$	43,000			$	55,000			$	57,500			$	114,000

Compute the machines payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your answers to the nearest whole dollar.) Year Net Cash Flows Present Value of 1 at 12% Present Value of Net Cash Flows 1 $ 2 3 81,000 57,000 97,000 140,000 57,000 432,000 4 5 Totals $ $ 0 Amount invested Net present value $ 0 Computation of Annual Depreciation Expense Annual Depr. Accumulated Beginning (40% of Book Book Value Depreciation at Value) Year-End Year Ending Book Value 1 2 3 4 5 Annual Cash Flows Year Net income Depreciation Net Cash Flow Cumulative Flow $ (278,000) 0 $ (278,000) 23,000 1 2 43,000 3 55,000 55,000 55,000 57,500 4 57,500 112,500 5 114,000 114,000 226,500 Payback period = years