The cash flows occur evenly within each year assume that


Question - 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 9% return on its investments.

Net Cash Flows

Year 1 - $78,000

Year 2 - $58,000

Year 3 - $75,000

Year 4 - $168,000

Year 5 - $54,000

Total - $433,000

a. Compute the net present value of this investment.

b. Should Beyer accept the investment?

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Accounting Basics: The cash flows occur evenly within each year assume that
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