Fully depreciated by the straight-line method

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Who Dat Restaurant is considering the purchase of a $10,100 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 2,050 soufflés per year, with each costing $2.45 to make and priced at $5.30. Assume that the discount rate is 14 percent and the tax rate is 40 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? Yes No

Reference no: EM13945184

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