Chauhan Restaurant is considering the purchase of a soufflé maker that costs $10,900. The soufflé maker has an economic life of 8 years and will be fully depreciated by the straight-line method. The machine will produce 1,200 soufflés per year, with each costing $2.60 to make and priced at $4.95. The discount rate is 10 percent and the tax rate is 23 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.)
Chauhan Restaurant is considering the purchase of a soufflé maker that costs $10,900. The soufflé maker has an economic life of 8 years and will be fully depreciated by the straight-line method. The machine will produce 1,200 soufflés per year, with each costing $2.60 to make and priced at $4.95. The discount rate is 10 percent and the tax rate is 23 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.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Vijay
Transcribed Image Text:Chauhan Restaurant is considering the purchase of a soufflé maker that costs $10,900.
The soufflé maker has an economic life of 8 years and will be fully depreciated by the
straight-line method. The machine will produce 1,200 soufflés per year, with each costing
$2.60 to make and priced at $4.95. The discount rate is 10 percent and the tax rate is 23
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.)
X Answer is complete but not entirely correct.
NPV
$
6,062.04 X
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