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This question was created from NPV and IRR calculations.docx https://www.coursehero.com/file/37641423/NPV-and-IRR-calculationsdocx/

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Please solve for NPV and include how to solve with financial calculator if possible.

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1.
Paul Restaurant is considering the purchase of a $10,500 souffle maker. The souffle maker has
an economic life of 7 years and will be fully depreciated by the straight-line method. The
machine will produce 1,400 souffles per year, with each costing $2.70 to make and priced at
$4.70. The discount rate is 11 percent and the tax rate is 24 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.)
Should the company make the purchase?

Top Answer

NPV = [CF1/(1+r)+ CF2/(1+r)^2+ CF3/(1+r)^3+...+ CFn/(1+r)^n]-Initial... View the full answer

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