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Amy's Ice Cream Shop is considering the purchase of a $7500 ice cream maker. The ice...

Amy's Ice Cream Shop is considering the purchase of a $7500 ice cream maker. The ice cream maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,300 cones 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%. What is the NPV of the project? Should the company make the purchase?

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