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estion 7 of 7 0.5/1 Canarie Pizzeria is considering expanding operations by establishing a delivery business. This will require the purchase of an oven that

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estion 7 of 7 0.5/1 Canarie Pizzeria is considering expanding operations by establishing a delivery business. This will require the purchase of an oven that will cost $ 52,000, including installation. The oven is expected to last five years, have a $5,200 residual value and will be depreciated using the straight-line method. Cash flows associated with the delivery business are as follows: Item Year 1 Year 2 Year 3 Year 4 Year 5 Revenue $ 67,600 $ 68,952 $ 81,364 $91,520 $ 99,050 Ingredients (26,104) (28,704) (31,610) (34,781) (38,164) Salary (25,896) (27.976) (30,056 ) (32,136) (34,112) Additional misc (2.184 ) (2,392) (2,600) (2,808) (2.912) Residual value 5,200 In addition to the above, there are tax consequences related to the new business, and the company's tax rate is 20 percent. Click here to view factor tables Calculate the internal rate of return for the delivery business. (Hint: Try a range of rates between 14 percent and 16 percent.) (Round present value factor calculations to 4 decimal places, es, 1.2151 and final answer to decimal places, es.18%) The internal rate of return 15.44 % Should Canarie Pizzeria invest in the delivery business it the required rate of return is 10 percent? Canarle Pizzeria Should Invest in the delivery business

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