Raphael Restaurant is considering the purchase of a $9,000 soufflé 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 1,500 soufflés per year, with each costing $2.30 to make and priced at $4.75. Assume that the discount rate is 14 percent and the tax rate is 34 percent. Should Raphael make the purchase?
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