Raphael Restaurant is considering the purchase of a $10,800 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 2,400 souffls per year, with each costing $2.80 to make and priced at $5.65. Assume that the discount rate is 16 percent and the tax rate is 35 percent.

What is the NPV of the project?

NPV

$

Should Raphael make the purchase?

Yes

No