Flatte restaurant is considering the purchase of a 9100, Ask an Expert

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Flatte Restaurant is considering the purchase of a $9,100 souffle maker. The souffle maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,550 soufflés per year, with each costing $2.20 to make and priced at $4.80. Assume that the discount rate is 12 percent and the tax rate is 35 percent.

What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV $

Should the company make the purchase?

Yes

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92680260

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