Question
Yummy Pizza Co. is looking to purchase a new woodfire pizza oven that cost $25000. This new oven will replace their current fully depreciated oven
Yummy Pizza Co. is looking to purchase a new woodfire pizza oven that cost $25000. This new oven will replace their current fully depreciated oven that they can sell for $2500. The new oven will allow the company to produce more pizzas which will result in new sales of $15000 per year with increased costs of $7500 . They expect to be able to sell the pizza oven at the end oif 10 years for $2000 and will be straight line depreciated over the 10-period to zero. Yumm has marginal tax rate of 34% and its require rate of return is 10%. What is the NPV for this project?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started