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 throughout each year. Assume that Beyer requires a 10% 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		$	60,000			$	40,000			$	70,000			$	125,000			$	35,000			$	330,000

a.	Compute the net present value of this investment.

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b.

Should Beyer accept the investment?

	Yes
	No

Hints

References

eBook & Resources