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Paul Restaurant is considering the purchase of a $11,100 souffl maker. The souffl maker has...

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Finance

Paul Restaurant is considering the purchase of a $11,100 souffl maker. The souffl maker has an economic life of 8 years and will be fully depreciated by the straight-line method. The machine will produce 1,600 souffls per year, with each costing $2.80 to make and priced at $4.75. The discount rate is 12 percent and the tax rate is 25 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.)

Should the company make the purchase?

  • Yes

  • No

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