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 9% 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 $60,000 Year 2 $55,000 Year 3 $83,000 Year 4 $150,000 Year 5 $45,000 Total $393,000 Net cash flows a. 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 9% Present Value of Net Cash Flows 0 Totals $ Amount invested Net present value b. Should Beyer accept the investment? Yes O No TABLE B.1* Present Value of 1 p=1/(1 + i)" Rate Perlods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 0.9434 0.8900 0.8396 .7921 0 W NOOoo OUT 0.9901 0.9804 0.9709 0.9615 0.9803 0 .9612 0.9426 0.9246 9151 0.8890 0.9610 0.9238 0.8885 0.8548 0.9515 0.9057 0.8626 0.8219 0.9420 0.8880 0.8375 0.7903 0.9327 0.8706 0.8131 0.7599 0.9235 0.8535 0.7894 0.7307 0.91430.8368 0.7664 0.7026 0.9053 0.82030.7441 0.6756 0.8963 0.8043 0.7224 0.6496 0.8874 0.7885 0.7014 0.6246 0.8787 0.7730 0.6810 0.6006 0.8700 0.75790.66110.5775 0.8613 0.7430 0.6419 0.5553 0.8528 0.7284 0.6232 0.5339 0.8444 0.7142 0.6050 0.5134 0.8360 0.7002 0.5874 0.4936 0.8277 0.6864 0.5703 0.4746 0.8195 0.6730 0.5537 0.4564 0.7798 0.6095 0.4776 0.3751 0.7419 0.5521 0.41200.3083 0.7059 0.5000 0.3554 0.2534 0.6717 0.4529 0.3066 0.2083 0.9524 0.9070 0.8638 0.8227 0.7835 0.7462 0.7107 0.6768 0.6446 0.6139 0.5847 0.5568 0.5303 0.5051 0.4810 0.4581 0.4363 0.4155 0.3957 0.3769 0.2953 0.2314 0.1813 0.1420 0.7050 0.6651 0.6274 0.5919 0.5584 0.5268 0.4970 0.4688 0.4423 0.4173 0.3936 0.3714 0.3503 0.3305 0.3118 0.2330 0.1741 .1301 0.0972 0.9346 0.9259 0.8734 0.8573 0.8163 0.7938 0.7629 0.7350 0.7130 0.6806 0.6663 0.6302 0.6227 0.5835 0.5820 0.5403 0.5439 0.5002 0.5083 0.4632 0.4751 0.4289 0.4440 0.3971 0.4150 0.3677 0.3878 0.3405 0.3624 0.3152 0.3387 0.2919 0.3166 0.2703 0.2959 0.2502 0.2765 0.2317 0.2584 0.2145 0.1842 0.1460 0.13140.0994 0.0937 0.0676 0.0668 0.0460 0.9174 0.8417 0.7722 0.7084 0.6499 0.5963 0.5470 0.5019 0.4604 0.4224 0.3875 0.3555 0.3262 0.2992 0.2745 0.2519 0.2311 0.2120 0.1945 0.1784 0.1160 0.0754 0.0490 0.0318 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 0.2897 0.2633 0.2394 0.2176 0.1978 0.1799 0.1635 0.1486 0.0923 0.0573 0.0356 0.0221 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 0.2875 0.2567 0.2292 0.2046 0.1827 0.1631 0.1456 0.1300 0.1161 0.1037 0.0588 0.0334 0.0189 0.0107 0.8696 0.7561 0.6575 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472 0.2149 0.1869 0.1625 0.1413 0.1229 0.1069 0.0929 0.0808 0.0703 0.0611 0.0304 0.0151 0.0075 0.0037 0 * Used to compute the present value of a known future amount. For example: How much would you need to invest today at 10% compounded semiannually to accumulate $5,000 in 6 years from today? Using the factors of n= 12 and i = 5% (12 semiannual periods and a semiannual rate of 5%), the factor is 0.5568. You would need to invest $2,784 today ($5,000 X 0.5568). TABLE B.2 Future Value of 1 f= (1 + i)" Rate Periods - 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0100 1.0201 1.0303 1.0406 1.0510 1.0615 1.0721 1.0829 1.0937 1.1046 1.1157 1.1268 1.1381 1.1495 1.1610 1.1726 1.1843 1.1961 1.2081 1.2202 1.2824 1.3478 1.4166 1.4889 1.0000 1.0000 1.0200 1.0300 1.0404 1.0609 1.0612 1.0927 1.0824 1.1255 1.1041 1.1593 1.1262 1.1941 1.1487 1.2299 1.1717 1.2668 1.1951 1.3048 1.21901.3439 1.2434 1.3842 1.2682 1.4258 1.2936 1.4685 1.3195 1.5126 1.34591.5580 1.3728 1.6047 1.4002 1.6528 1.4282 1.7024 1.4568 1.7535 1.4859 1.8061 1.6406 2.0938 1.8114 2.4273 1.99992.8139 2.2080 3.2620 1.0000 1.0400 1.0816 1.1249 1.1699 1.2167 1.2653 1.3159 1.3686 1.4233 1.4802 1.5395 1.6010 1.6651 1.7317 1.8009 1.8730 1.9479 2.0258 2.1068 2.1911 2.6658 3.2434 3.9461 4.8010 1.0000 1.0500 1.1025 1.1576 1.2155 1.2763 1.3401 1.4071 1.4775 1.5513 1.6289 1.7103 1.7959 1.8856 1.9799 2.0789 2.1829 2.2920 2.4066 2.5270 2.6533 3.3864 4.3219 5.5160 7.0400 1.0000 1.0600 1.1236 1.1910 1.2625 1.3382 1.4185 1.5036 1.5938 1.6895 1.7908 1.8983 2.0122 2.1329 2.2609 2.3966 2.5404 2.6928 2.8543 3.0256 3.2071 4.2919 5.7435 7.6861 10.2857 1.0000 1.0700 1.1449 1.2250 1.3108 1.4026 1.5007 1.6058 1.7182 1.8385 1.9672 2.1049 2.2522 2.4098 2.5785 2.7590 2.9522 3.1588 3.3799 3.6165 3.8697 1.0000 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 2.5182 2.7196 2.9372 3.1722 3.4259 3.7000 3.9960 4.3157 4.6610 6.8485 10.0627 14.7853 21.7245 1.0000 1.0900 1.1881 1.2950 1.4116 1.5386 1.6771 1.8280 1.9926 2.1719 2.3674 2.5804 2.8127 3.0658 3.3417 3.6425 3.9703 4.3276 4.7171 5.1417 5.6044 8.6231 13.2677 20.4140 31.4094 1.0000 1.1000 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 2.8531 3.1384 3.4523 3.7975 4.1772 4.5950 5.0545 5.5599 6.1159 6.7275 10.8347 17.4494 28.1024 45.2593 1.0000 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 3.4785 3.8960 4.3635 4.8871 5.4736 6.1304 6.8660 7.6900 8.6128 9.6463 17.0001 29.9599 52.7996 93.0510 1.0000 1.1500 1.3225 1.5209 1.7490 2.0114 2.3131 2.6600 3.0590 3.5179 4.0456 4.6524 5.3503 6.1528 7.0757 8.1371 9.3576 10.7613 12.3755 14.2318 16.3665 32.9190 66.2118 133.1755 267.8635 30 35 7.6123 10.6766 1 4.9745 Used to compute the future value of a known present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly for 5 years? Using the factors of n=20 and i = 2% (20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ($3,000 x 1.4859). p=[1-0 +oni TABLE B.3+ Present Value of an Annuity of 1 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% WHO OWN- 0.9901 1.9704 2.9410 3.9020 4.8534 5.7955 6.7282 7.6517 8.5660 9.4713 10.3676 11.2551 12.1337 13.0037 13.8651 14.7179 15.5623 16.3983 17.2260 18.0456 22.0232 25.8077 29.4086 32.8347 0.9804 1.9416 2.8839 3.8077 4.7135 5.6014 6.4720 7.3255 8.1622 8.9826 9.7868 10.5753 11.3484 12.1062 12.8493 13.5777 14.2919 14.9920 15.6785 16.3514 19.5235 22.3965 24.9986 27.3555 0.9709 0.9615 1.9135 1.8861 2.8286 2.7751 3.7171 3.6299 4.5797 4.4518 5.4172 5.2421 6.2303 6.0021 7.0197 6.7327 7.7861 7.4353 8.5302 8.1109 9.2526 8.7605 9.9540 9.3851 10.6350 9.9856 11.2961 10.5631 11.9379 11.1184 12.561111.6523 13.1661 12.1657 13.7535 12.6593 14.3238 13.1339 14.8775 13.5903 17.4131 15.6221 19.6004 17.2920 21.4872 18.6646 23.1148 19.7928 0.9524 0.9434 1.8594 1.8334 2.7232 2.6730 3.5460 3.4651 4.3295 4.2124 5.0757 4.9173 5.7864 5.5824 6.4632 6.2098 7.1078 6.8017 7.7217 7.3601 8.3064 7.8869 8.8633 8.3838 9.3936 8.8527 9.8986 9.2950 10.37979.7122 10.8378 10.1059 11.2741 10.4773 11.6896 10.8276 12.0853 11.1581 12.4622 11.4699 14.093912.7834 15.3725 13.7648 16.3742 14.4982 17.1591 15.0463 0.9346 0.92590.9174 0.9091 0.89290.8696 1.8080 1.7833 1.7591 1.7355 1.6901 1.6257 2.6243 2.5771 2.5313 2.4869 2.4018 2.2832 3.3872 3.3121 3.2397 3.1699 3.0373 2.8550 4.1002 3.9927 3.88973.7908 3.6048 3.3522 4.7665 4.6229 4.48594.3553 4.1114 3.7845 5.3893 5.2064 5.0330 4.8684 4.5638 4.1604 5.9713 5.7466 5.5348 5.3349 4.9676 4.4873 6.5152 6.2469 5.9952 5.7590 5.3282 4.7716 7.0236 6.7101 6.4177 6.1446 5.6502 5.0188 7.4987 7.1390 6.80526.4951 5.9377 5.2337 7.9427 7.5361 7.1607 6.8137 6.1944 5.4206 8.3577 7.9038 7.48697.1034 6.4235 5.5831 8.7455 8.2442 7.7862 7.3667 6.6282 5.7245 9.1079 8.5595 8.0607 7.6061 6.81095.8474 9.4466 8.8514 8.3126 7.8237 6.9740 5.9542 9.7632 8.5436 8.0216 7.1196 6.0472 10.0591 9.3719 8.7556 8.2014 7.2497 6.1280 10.3356 9.6036 8.9501 8.36497.3658 10.5940 9 11.653610.67489.8226 9.0770 7.8431 6.4641 12.4090 11.2578 10.27379.42698.0552 6.5660 12.9477 11.6546 10.5668 9.6442 8.1755 6.6166 13.3317 11.9246 10.7574 9.77918.2438 6.6418 # Used to calculate the present value of a series of equal payments made at the end of each period. For example: What is the present value of $2,000 per year for 10 years assuming an annual interest rate of 9%. For (n= 10,i=9%), the PV factor is 6.4177. $2,000 per year for 10 years is the equivalent of $12,835 today ($2,000 X 6.4177). f=[(1 + i)" 19i TABLE B.45 Future Value of an Annuity of 1 Rate Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 15% 1.0000 1.0000 1.0000 1.0000 1 .0000 1.0000 1.0000 1.0000 2.0100 2.02002.0300 2.0400 2.0500 2.0600 2.0700 2.0800 3.03013.0604 3.0909 3.1216 3.1525 3.1836 3.2149 3.2464 4.0604 4.1216 4.1836 4.2465 4.3101 4.3746 4.4399 4.5061 5.1010 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 6.1520 6.3081 6.4684 6.6330 6.80196.9753 7.1533 7.3359 7.21357.4343 7.6625 7.89838.1420 8.3938 8.6540 8.9228 8.2857 8.5830 8.8923 9 .2142 9.5491 9.8975 10.2598 10.6366 9.3685 9.7546 10.1591 10.5828 11.0266 11.491311.9780 12.4876 10.4622 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 11.5668 12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 12.6825 13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 13.8093 14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 2 1.4953 14.9474 15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 2 4.2149 16.0969 17.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 17.2579 18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 18.4304 20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 19.6147 21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 3 7.4502 20.8109 22.8406 25.116927.6712 30.5390 33.7600 37.3790 41.4463 22.0190 24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 28.243232.0303 36.459341.6459 47.7271 54.8645 63.2490 73.1059 34.7849 40.5681 47.5754 56.084966.4388 79.0582 94.4608 113.2832 41.660349.994560.4621 73.6522 90.3203 111.4348 138.2369172.3168 48.8864 60.4020 75.401395.0255 120.7998 154.7620 199.6351 259.0565 1.0000 1.0000 1.0000 1.0000 2.0900 2.1000 2.1200 2.1500 3.2781 3.3100 3.3744 3.4725 4.5731 4.6410 4.7793 4.9934 5.9847 6.1051 6.3528 6.7424 7.5233 7.7156 8.1152 8.7537 9.2004 9.4872 10.0890 11.0668 11.0285 11.4359 12.2997 13.7268 13.0210 13.5795 14.7757 16.7858 15.1929 15.9374 17.5487 20.3037 17.560318.5312 20.6546 24.3493 20.1407 21.3843 24.1331 29.0017 22.9534 24.5227 28.0291 34.3519 26.0192 27.9750 32.3926 40.5047 29.360931.7725 37.2797 47.5804 33.0034 35.9497 42.7533 55.7175 36.9737 40.5447 48.8837 65.0751 41.3013 45.5992 55.7497 75.8364 46.0185 51.1591 63.4397 88.2118 51.1601 57.2750 72.0524 102.4436 84.700998.3471 133.3339 212.7930 136.3075 164.4940 241.3327 434.7451 215.7108 271.0244 431.6635 881.1702 337.8824 442.5926 767.0914 1,779.0903 19 20 Used to calculate the future value of a series of equal payments made at the end of each period. For example: What is the future value of $4,000 per year for 6 years assuming an annual interest rate of 8%. For (n=6,i=8%), the FV factor is 7.3359. $4,000 per year for 6 years accumulates to $29,343.60 ($4.000 x 7.3359)