The owners of a chain of fast-food restaurants spend $26 million installing donut makers in all their restaurants. This is expected to increase cash flows by $9 million per year for the next five years. If the discount rate is 6.7%, were the owners correct in making the decision to install donut makers? O A. No, as it has a net present value (NPV) of - $1.12 million. OB. Yes, as it has a net present value (NPV) of $11.2 million. O C. No, as it has a net present value (NPV) of - $2.24 million. O D. Yes, as it has a net present value (NPV) of $6.72 million.

The owners of a chain of fast-food restaurants spend $26 million installing donut makers in all their restaurants. This is expected to increase cash flows by $9 million per year for the next five years. If the discount rate is 6.7%, were the owners correct in making the decision to install donut makers? O A. No, as it has a net present value (NPV) of - $1.12 million. OB. Yes, as it has a net present value (NPV) of $11.2 million. O C. No, as it has a net present value (NPV) of - $2.24 million. O D. Yes, as it has a net present value (NPV) of $6.72 million.

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10PA: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000,...

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