Gomez is considering a $180,000 investment with the following net cash flows. Gomez requires a 10% return
Question:
Gomez is considering a $180,000 investment with the following net cash flows. Gomez requires a 10% return on its investments.
(a) Compute the net present value of this investment.
(b) Should Gomez accept the investment?
Transcribed Image Text:
Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows $60,000 $40,000 $70,000 $125,000 $35,000
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a b Accept the investment The investment should be accepted because its net present value ...View the full answer
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