MT13

Raphael Restaurant is considering the purchase of a $9, 800 souffle maker. The souffle maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1, 900 souffles per year, with each costing $2.30 to make and priced at $5.30. Assume that the discount rate is 11 percent and the tax rate is 35 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)) Should Raphael make the purchase? No Yes