Should the company make the purchase

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Flatte Restaurant is considering the purchase of a $7500 souffle maker. The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce $1300 souffles per year, with each costing $2.15 to make and priced at $5.25. Assume that the discount rate is 14% and the tax rate is 34 %. Should the company make the purchase?

Reference no: EM132014533

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