Question
Gomez is considering a $185,000 investment with the following net cash flows. Gomez requires a 15% return on its investments. (PV of $1, FV of
Gomez is considering a $185,000 investment with the following net cash flows. Gomez requires a 15% 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 | |
|---|---|---|---|---|---|
| Net cash flows | $80,000 | $48,000 | $100,000 | $146,000 | $54,000 |
(a) Compute the net present value of this investment. (b) Should Gomez accept the investment? 
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Management Accounting
Authors: Charles T Horngren, Gary L Sundem, William O Stratton, Howard D Teall, George Gekas
5th Canadian Edition
0131922688, 978-0131922686
