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Calculate the net present value for raiders restaurant

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Reference no: EM132931998

Raiders Restaurant is considering the purchase of an $8,000,000 flat-top grill. The grill has an economic life of 6 years and will be fully depreciated using the straight-line method. The grill is expected to produce 550,000 tacos per year for the next 6 years, with each costing $3.50 to make and priced at $8. Assume the discount rate is 10% and the tax rate is 21%. The restaurant expects the market value of the grill to be $0, 6 years from now.

Problem 1: Calculate the net present value for the project. (Round to 2 decimals)

Reference no: EM132931998

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