Question
Gomez is considering a $205,000 investment with the following net cash flows. Gomez requires a 12% return on its investments. (PV of $1, FV of
Gomez is considering a $205,000 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) (Use appropriate factor(s) from the tables provided.)
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Net cash flows | $86,000 | $43,000 | $75,000 | $171,000 | $43,000 |
(a) Compute the net present value of this investment. (b) Should Gomez accept the investment?
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Fundamental Accounting Principles
Authors: John J Wild, Ken Shaw
25th Edition
1260247988, 978-1260247985
