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Beyer Company is considering the purchase of an asset for $200,000. It is expected to produce the following net cash flows. The cash flows occur
Beyer Company is considering the purchase of an asset for $200,000. 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. EVA of $1 and PVA of $1 ) (Use appropriate factor(s) from the tables provided.) Year 1 Year 2 Year 3 $84,000 $59,000 $88,000 $131,000 $59,000 $421,000 ear 4 ear Total Net cash flows a. Compute the net present value of this investment. Present Present Value of Net Cash Value of1 Net Cash Flows Year Flows at 12% Totals Amount invested Net present value b. Should Beyer accept the investment? O Yes No
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