:(:82" of "595:) Calculating Project NPV Chauhan Restaurant is considering the purchase of a souffle maker that costs $8,600. The souffle maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,100 souffls per year, with each costing $2.15 to make and priced at $5.95. The discount rate is 14 percent and the tax rate is 21 percent. Should the company make the purchase? Calculating Project NPV The Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash,

1. Calculating Project NPV Chauhan Restaurant is considering the purchase of a souffl maker that costs $8,600. The souffl maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,100 souffls per year, with each costing \$2.15 to make and priced at \$5.95. The discount rate is 14 percent and the tax rate is 21 percent. Should the company make the purchase? 2. Calculating Project NPV The Fancy Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 22 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. a. Compute the incremental net income of the investment for each year. b. Compute the incremental cash flows of the investment for each year. c. Suppose the appropriate discount rate is 12 percent. What is the NPV of the project