The owners of a chain of fast-food restaurants spend $24 million installing donut makers in all their restaurants. This
Posted: Sun Jul 03, 2022 12:54 pm
The owners of a chain of fast-food restaurants spend $24million installing donut makers in all their restaurants. This isexpected to increase cash flows by $11 million per year for thenext five years. If the discount rate is 6.6%, were the ownerscorrect in making the decision to install donut makers? A. No, asit has a net present value (NPV) of −$2 million. B. Yes, as ithas a net present value (NPV) of $13 million. C. Yes, as it has anet present value (NPV) of $22 million. D. No, as it has a netpresent value (NPV) of −$4 million.