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Calculating Project NPV: Paul Restaurant is considering the purchase of a $9,300 souffl maker. The souffl maker has an economic life of five years and
Calculating Project NPV: Paul Restaurant is considering the purchase of a $9,300 souffl maker. The souffl maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,400 souffls per year, with each costing $1.97 to make and priced at $4.95. The discount rate is 14 percent and the tax rate is 21 percent. Should the company make the purchase?
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