Question: Tarjee Florist is considering replacing an old refrigeration unit with a larger unit to store flowers. Because the new refrigeration unit has a larger capacity,
Tarjee Florist is considering replacing an old refrigeration unit with a larger unit to store flowers. Because the new refrigeration unit has a larger capacity, Tarjee estimates that it can sell an additional $ of flowers a year. The cost of the flowers is $ In addition, the new unit is energy efficient and should save $ in electricity each year. It will cost an extra $ per year for maintenance. The new refrigeration unit costs $ and has an expected life of years. The old unit is fully depreciated and can be sold for an amount equal to disposal cost. At the end of years, the new unit has an expected residual value of $
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Determine the net present value of the investment if the required rate of return is percent. Ignore taxes.Round present value factor calculations to decimal places, eg and final answer to decimal places, eg Enter negative amounts using either a negative sign preceding the number eg or parentheses eg
The net present value
$
Should the investment be undertaken?
The investment be undertaken.
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