1. Wood Street Pizza Company is considering buying a new $39,000 oven. It is estimated that the oven should produce $10,460 of operating cash flows for the next 6-years at which point it would no longer be used and have to be replaced. Assuming a discount rate of 14%, what is the Net Present Value of the oven project?

2. Using the information provided in question #1 above, what is the Profitability Index on Wood Street Pizza Company's oven project?

Answer rating: 100% (QA)

To calculate the Net Present Value NPV of the oven project we need to discount the projected cash fl... View the full answer