Exercise 24-2 Net present value LO P3

Beyer Company is considering the purchase of an asset for $215,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer 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				Total
Net cash flows		$	65,000			$	58,000			$	80,000			$	145,000			$	52,000			$	400,000

a. Compute the net present value of this investment. b. Should Beyer accept the investment?

Check my work 2 Exercise 24-2 Net present value LO P3 Beyer Company is considering the purchase of an asset for $215,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer 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.) 2 points Year 3 Year 1 $65,000 Net cash flows Year 2 $58,000 $80,000 Year 4 $145,000 Year 5 $ 52,000 Total $400,000 eBook Hint Print a. Compute the net present value of this investment b. Should Beyer accept the investment? References 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 Present Value of 1 at 12% Present Value of Net Cash Flows 1 2 3 4 5 Totals Amount invested Mc Graw Grow Hill Lducation