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Beyer Company is considering the purchase of an asset for $190,000. It is expected to produce the following net cash flows. The cash flows occur
Beyer Company is considering the purchase of an asset for $190,000. 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 4 Year 1 Year 5 Total Year 2 Year 3 Net cash flows $83,000 $56,000 $94,000 $164,000 $56,000 $453,000 a. Compute the net present value of this investment Net cash Present Flows Value of 1 Present Value of Year Net Cash Flows at 12% Totals Amount invested Net present value b. Should Beyer accept the investment? Yes No
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