Exercise 24-2 Net present value LO P3

Beyer Company is considering the purchase of an asset for $205,000. 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				Year 2				Year 3				Year 4				Year 5				Total
Net cash flows		$	62,000			$	49,000			$	98,000			$	166,000			$	39,000			$	414,000

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
1
2
3
4
5
Totals
Amount invested
Net present value