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Net present value of espresso machine

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At this point, we need to determine the net present value of the espresso machine. This is determined by applying the 18% discount rate to the annual net cash flow and bringing it back to the value it would have had at the beginning of each year. The initial investment in the espresso machine is covered by the machine's positive net present value, which comes to $53,092.17. Since this is the case, the bakery ought to go ahead and purchase the espresso machine.

Reference no: EM133306631

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