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Need help revising EC #4 Gomez is considering a $230,000 investment with the following net cash flows. Gomez requires a 15% return on its investments.
Need help revising EC #4
Gomez is considering a $230,000 investment with the following net cash flows. Gomez requires a 15% return on its investments. (PV of $1, FN of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.). Year 1 $78,000 Year 2 $50,000 Mean 3 $90,000 Yean 4 $154,900 Year 5 $44,000 Net cash flows (a) Compute the net present value of this investment. (b) Should Gomez accept the investment? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your answers to the nearest whole dollar.) Year Net Cash Flows Year 1 Year 2 $ 78,000 50,000 90,000 154,000 44,000 $ 416,000 Present Present Value of Nalue of 1 at Net Cash 15% Flows 0.8700 XS 67,860 X 0.7560 37,800 x 0.6580 X 59,220 X 0.5720 x 88,088 X 0.4970 21,868 274,836 Year 3 Year 4 Year 5 Totals Initial investment 230,000
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