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horsena [70]
4 years ago
12

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 throughout each year. Assume that Beyer requires a 12% return on its investments. (FV of $1, PV of $1, FVA of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Net cash flows $77,000 $ 54,000 $ 82,000 $ 172,000 $ 38,000 $ 423,000
a. Compute the net present value of this investment.
b. Should Beyer accept the investment?
Business
1 answer:
Over [174]4 years ago
6 0

Answer:

a) Net present value of investment = $86,036

b) Since the Net present value is positive thus, Beyer should accept the investment

Explanation:

Data provided in the question:

Cost of the asset = $215,000

Rate of return = 12% = 0.12

Now,

Present Value of Net Cash Flows = Net cash flow × Present value factor

also,

Present value factor = (1 + rate)⁻ⁿ

here,

n is the year

thus,

Year 1             Net cash flows        Present value factor          Present value

  1                      77,000                      0.89286                             68,750

  2                      54,000                     0.79719                              43,048

  3                      82,000                     0.71178                                58,366

  4                      172,000                    0.63552                             109,309

  5                      38,000                     0.56743                              21,562

Total                  423,000                                                              301,036

a) Net present value of investment = Total present value - Amount invested

= 301,036 - 215,000

= $86,036

b) Since the Net present value is positive thus, Beyer should accept the investment

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Explanation:

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If the boards 1 and 2 are the only defective boards in a lot of five, then

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b)

x                  0               1                    2

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μₓ=0.8, σX  =0.6

 

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(Guessing, i could be wrong but i like helping so here your go i guess)

Explanation:

DOs and DON’Ts

DO Organize your response. Look at the question; it has a natural

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DO Ask your friends and family to help you remember all the details

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to forget things you have done in the past.

DO Fit your essay into the big picture of your application. If you say

you have always wanted to be a veterinarian, but have no

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DO Show what you are like as a person, but be as selective as

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characteristics that prompted your career choice.

DO Find a controlling idea for your essay. Smooth prose leaves a

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DO Take your drafts to the College Writing Center or ask a

guidance counselor for help. Does the essay flow? Is the main

point clear? Do you sound like a real person (preferably an

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DO Revise the essay and proofread.

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me?”

DON’T Just tell a story. You want to explain your career goals in

an interesting way, not entertain with descriptive

adjectives.

DON’T Assume names of people and places give enough

information. Describe your activities and experiences as

they relate to your career goals.

DON’T Write what you think the scholarship committee wants to

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DON’T Use clichés or generalities. This wastes valuable space and

time.

DON’T Brag. Trust that your good points will shine through

7 0
3 years ago
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