Exercise 24-2 Net present value LO P3 Beyer Company is considering the purchase of an asset for $250,000. It is expected to produce the following net cash flows. The cash flows occur evenly within each year. Assume that Beyer 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 $67,200 Year 2 $51,000 Year 3 $87,000 Year 4 $137,000 Year 5 $37,000 Total $379,000 Net cash flows a. Compute the nel present value of this investment b. Should Beyer accept the investment? 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.) Net Cash Flows Year Present Value of 1 at 15 Present Value of Net Cash Flows 1 2 a. Compute the net present value of this investment. b. Should Beyer accept the investment? Complete this question by entering your answers in the tal Required a Required B Compute the net present value of this investment. (Round your Year Net Cash Flows Present Value of 1 at 15% Present Value of Net Cash Flows 1 4 5 Totals $ 0 $ 0 Amount invested Net present value $ 0 Exercise 24-5 Payback period computation; even cash flows LO P1 Compute the payback period for each of these two separate investments a. A new operating system for an existing machine is expected to cost $250,000 and have a useful life of four years. The system yields an incremental after-tax income of $72,115 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000 b. A machine costs $210,000, has a $13,000 salvage value, is expected to last seven years, and will generate an after-tax income of $39,000 per year after straight-line depreciation Payback Period Choose Numerator: Choose Denominator: Cost of investment 1 Annual net cash flow 250,000/ $ 120,115 - $ 210,000/ $ 60,389 = Payback Period Payback period a $ 2.08 years 3.45 years b