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Paul Restaurant is considering the purchase of a $10,500 soufflé maker. The soufflé maker has an...

Paul Restaurant is considering the purchase of a $10,500 soufflé maker. The soufflé maker has an economic life of 7 years and will be fully depreciated by the straight-line method. The machine will produce 1,400 soufflés per year, with each costing $2.70 to make and priced at $4.70. The discount rate is 11 percent and the tax rate is 24 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.)

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Answer #1

Total depreciation and net revenue has been calculated differently. We also can use Excel to calculate NPV easily and quickly. Calculations are shown in the given image.

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