Fully depreciated by the straight line method

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Reference no: EM131064734

Raphael Restaurant is considering the purchase of a $9,400 souffle maker. The maker has an economic life of 5 years and will be fully depreciated by the straight line method. The machine will produce 1,700 souffles per year, with each costing $2.50 to make and priced at $4.95. assume that the discount rate is 16% and the tax rate is 34%.

What is the NPV of the project? Should Raphael make the purchase?

Reference no: EM131064734

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