calculate the NPV and payback period for the rotisserie cooker. The cost of capital is assumed to be 8%. The useful life of the machine is ten year.

One recommendation made by Chef Ralph Jeffries is to offer rotisserie chicken to increase sales in the cafeteria. Ralph would purchase five-pound broilers (at $1.08 per pound) and prepare them in a rotisserie placed directly on the serving line in the cafeteria. The cook would quarter the chickens right in front of the customer who would be enticed by both the sight and smell. Ralph estimates they could sell eighty portions a day. Average labor cost is $16.00 per hour; Ralph calculates it would take about one hour of prep time for every batch of twenty chickens, which would include prepping the chicken and loading and cleaning the rotisserie. In addition, he approximates another two minutes of labor per chicken quarter to remove it from the rotisserie, portion it, and serve it. Using an operating margin of 52 percent, Ralph would like to charge $4.00 per portion. Jim is questioning the price since they usually use the markup factor to determine price and this would be quite different. More so, he wonders if spending $12,500 on a new rotisserie would really give him a return on his money. hio maular meeting with Linda Bolton, clinical nutrition Hon but One recommendation made by Chef Ralph Jeffries is to offer rotisserie chicken to increase sales in the cafeteria. Ralph would purchase five-pound broilers (at $1.08 per pound) and prepare them in a rotisserie placed directly on the serving line in the cafeteria. The cook would quarter the chickens right in front of the customer who would be enticed by both the sight and smell. Ralph estimates they could sell eighty portions a day. Average labor cost is $16.00 per hour; Ralph calculates it would take about one hour of prep time for every batch of twenty chickens, which would include prepping the chicken and loading and cleaning the rotisserie. In addition, he approximates another two minutes of labor per chicken quarter to remove it from the rotisserie, portion it, and serve it. Using an operating margin of 52 percent, Ralph would like to charge $4.00 per portion. Jim is questioning the price since they usually use the markup factor to determine price and this would be quite different. More so, he wonders if spending $12,500 on a new rotisserie would really give him a return on his money. hio maular meeting with Linda Bolton, clinical nutrition Hon but