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Flatte Restaurant is considering the purchase of a $10,000 souffl maker. The souffl maker has an economic life of five years and will be fully
Flatte Restaurant is considering the purchase of a $10,000 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 2,000 souffls per year, with each costing $2.40 to make and priced at $5.25. Assume that the discount rate is 13 percent and the tax rate is 40 percent. |
What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
NPV | $ |
Should the company make the purchase? | ||||
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