Paul Restaurant is considering the purchase of a $10,400 soufflé maker. The soufflé maker has an...

Paul Restaurant is considering the purchase of a $10,400 soufflé maker. The soufflé maker has an economic life of 7 years and will be fully depreciated by the straight-line method. The machine will produce 1,200 soufflés per year, with each costing $2.60 to make and priced at $4.95. The discount rate is 10 percent and the tax rate is 23 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?

No
Yes

Expert Solution

jeff jeffy answered 1 year ago

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