The owners of a chain of fast-food restaurants spend $28 million installing donut makers in all their restaurants. This is expected to increase cash flows by $12 million per year for the next five years. If the discount rate is 6.2%, were the owners correct in making the decision to install donut makers?

A.Yes, as it has a net present value (NPV) of

$13

million.

B.No, as it has a net present value (NPV) of

$4

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

$2

million.