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?