Problem 6-1 Calculating Project NPV

Raphael Restaurant is considering the purchase of a $10,300 souffl maker. The souffl maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 2,150 souffls per year, with each costing $2.80 to make and priced at $5.40. Assume that the discount rate is 15 percent and the tax rate is 35 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 Raphael make the purchase?

	Yes
	No