Fully depreciated by the straight-line method

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Flatte Restaurant is considering the purchase of a $10,500 soufflé maker. The soufflé maker has an economic life of four years and will be fully depreciated by the straight-line method. The machine will produce 2,250 soufflés per year, with each costing $2.70 to make and priced at $6.00. Assume that the discount rate is 15 percent and the tax rate is 34 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.) NPV $=

Should the company make the purchase? No Yes

Reference no: EM131186494

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Fully depreciated by the straight-line method : Flatte Restaurant is considering the purchase of a $10,500 soufflé maker. The soufflé maker has an economic life of four years and will be fully depreciated by the straight-line method. The machine will produce 2,250 soufflés per year, with each cost..

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