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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?

Yes

No

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