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The owners of a chain of fast-food restaurants spend $24 million installing donut makers in all their restaurants. This is expected to increase cash flows
The owners of a chain of fast-food restaurants spend $24 million installing donut makers in all their restaurants. This is expected to increase cash flows by $11 million per year for the next five years. If the discount rate is 6.6%, were the owners correct in making the decision to install donut makers? A. No, as it has a net present value (NPV) of $2 million. B. Yes, as it has a net present value (NPV) of $13 million. C. Yes, as it has a net present value (NPV) of $22 million. D. No, as it has a net present value (NPV) of $4 million.
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