Question
Gomez is considering a $200,000 investment with the following net cash flows. Gomez requires a 12% return on its investments. (PV of $1, FV of
Gomez is considering a $200,000 investment with the following net cash flows. Gomez requires a 12% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Net cash flows | $68,000 | $50,000 | $98,000 | $171,000 | $35,000 |
(a) Compute the net present value of this investment.
(b) Should Gomez accept the investment?
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Current Issues In Auditing
Authors: Michael J Sherer, W Stuart Turley
3rd Edition
1853963658, 978-1853963650
