Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the owners of a chain of fast-food restaurants spe

The owners of a chain of fast-food restaurants spend $25 million installing donut makers in...

70.2K

Verified Solution

Question

Accounting

The owners of a chain of fast-food restaurants spend $25 million installing donut makers in all their restaurants. This is expected to increase cash flows by $11 million per year for the next five years. If the discount rate is 5.3%, were the owners correct in making the decision to install donut makers? No, as it has a net present value (NPV) of -$4.45 million. No, as it has a net present value (NPV) of -$2.22 million. Yes, as it has a net present value (NPV) of $13.34 million. Yes, as it has a net present value (NPV) of $22.23 million. Yes, as it has a net present value (NPV) of $31.00 million.
image
The owners of a chain of fast-food restaurants spend $25 million installing donut makers in all their restaurants. This is expected to increase cash flows by $11 million per year for the next five years. If the discount rate is 5.3%, were the owners correct in making the decision to install donut makers? No, as it has a net present value (NPV) of $4.45 million. No, as it has a net present value (NPV) of $2.22 million. Yes, as it hs a net present value (NPV) of \$13.34 million. Yes, as it has a net present value (NPV) of $22.23 million. Yes, as it has a net present value (NPV) of $31.00 million

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students