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The owners of a chain of fast-food restaurants spend $29 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 $29 million installing donut makers in all their restaurants. This is expected to increase cash flows by $8 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.No, as it has a net present value (NPV) of $1 million.
B.Yes, as it has a net present value (NPV) of $5 million.
C.No, as it has a net present value (NPV) of $0 million.
D.Yes, as it has a net present value (NPV) of $3 million.
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