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Use the partial chart below to determine the net present value of an asset whose initial cost is $80,000 and will generate an annual net

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Use the partial chart below to determine the net present value of an asset whose initial cost is $80,000 and will generate an annual net cash flow of $12,000 for ten years. The discount rate or the cost of capital is 12%. Year 1 Year 2 Year 3 Year 4 Year 5 12% 0.89286 0.79719 0.71178 0.63552 0.56743 Year 6 Year 7 Year 8 Year 9 Year 10 0.50663 0.45235 0.40388 0.36061 0.32197 Should the company purchase the asset? _Yes, No Use the chart above to calculate the net present value of an investment whose initial cost is $11,500 and will generate an annual net cash flow as shown below. Year 1 = $2,000 Year 2 - $3,000 Year 3 = $7,000 Year 4 - $2,000 Year 5 = $2,500 Total Present Value = Should the firm purchase the asset? Yes, No

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