Question
Gomez is considering a $215,000 investment with the following net cash flows. Gomez requires a 15% return on its investments. (PV of $1, FV of
Gomez is considering a $215,000 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 | $67,000 | $55,000 | $87,000 | $153,000 | $50,000 |
(a) Compute the net present value of this investment. (b) Should Gomez accept the investment?
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Integrated Audit Practice Case
Authors: David S. Kerr, Randal J. Elder, Alvin A. Arens
5th Edition
0912503351, 9780912503356
