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Compute the net present value of this investment

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Beyer Company is considering the purchase of an asset for $180,000. 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          TotalNet

cash flows $82,000      $56,000     $74,000     $134,000    $50,000          $396,000

Problem a. Compute the net present value of this investment.

Problem b. Should Beyer accept the investment?

Reference no: EM132459611

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