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Flatte Restaurant is considering the purchase of a $10200 soufflé maker The soufflé maker has an economic life of five years and will be fully depreciated by the straight line method The machine

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?

 

Apr 06 2020 View more View Less

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