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A restaurant makes its own pizza crust. With the rising cost of labor, however, the restaurant is investigating the possibility of buying the pizza crust
A restaurant makes its own pizza crust. With the rising cost of labor, however, the restaurant is investigating the possibility of buying the pizza crust instead of making it internally. The equipment (with a remaining life of 5 years) and remaining ingredients can be sold immediately for $20,000. The restaurant would spend $5,000 per year for the crusts for 5 straight years. Assuming that the payment is due at the end of the year and that the required rate of return is 15 percent, compute the NPV for the decision to buy the crust. Now compute the IRR for the same decision. Round to two decimal places. NPV = $ IRR=
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