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Question: Flatte Restaurant is considering the purchase of a $10,200 soufflé maker. The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 2,100 soufflés per year, with each costing $2.50 to make and priced at $5.20. Assume that the discount rate is 12 percent and the tax rate is 35 percent.

What is the NPV ?

Should the company make the purchase?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92813800

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