Problem 6-1 Calculating Project NPV Paul Restaurant is considering the purchase of a $10,600 souffl maker. The souffl maker has an economic life of 7 years and will be fully depreciated by the straight-line method. The machine will produce 1,500 souffls per year, with each costing $2.80 to make and priced at $4.75. The discount rate is 12 percent and the tax rate is 25 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.) NPV $ Should the company make the purchase? O Yes O No

Paul Restaurant is considering the purchase of a $10,600 souffl maker. The souffl maker has an economic life of 7 years and will be fully depreciated by the straight-line method. The machine will produce 1,500 souffls per year, with each costing $2.80 to make and priced at $4.75. The discount rate is 12 percent and the tax rate is 25 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.) NPV Should the company make the purchase? Yes No