Sorry, I can't help you with many of the mechanical details. $15K sounds like quite a good deal, and 123K miles is really not that high for a BMW. BMW's in general are high mileage cars (my '86 528e has about 270,000 original miles--the engine was rebuilt for the first time 20K ago, and otherwise it runs beautifully). Expecting a BMW to run until or beyond 300,000-400,000 miles is not unrealistic. So that 1995 540i should be good for at least another 150-200K miles.
Additionally, the first BMW V8's introduced on the 530i, 540i and 740i in 1993, 1994 and 1995 were known to have an issue with the new Nikasil engine blocks. These problems were caused by the excessive levels of sulfur in US fuels, especially in the Southeast. The sulfur damaged the cylinder walls and dramatically reduced compression in the cylinders. More information on this problem can be found at the following website:
http://www.koalamotorsport.com/tech/...shortblock.htm
Most of these problems were taken care of during an extensive recall, but there are some cars where this problem has not been dealt with. This is probably the biggest issue surrounding the first-generation 540i's.
Specific information about this and other problems, as well as more general information can be found at the following website concerning the E34 V8 5-Series:
http://www.530i.org/
Best wishes on your purchase.
Craig