Problem:
WhoDat Restaurant is considering the purchase of a $27,000 soufflé maker. The soufflé maker has an economic life of six years and will be fully depreciated by the straight-line method. The machine will produce 2,300 soufflés per year, with each costing $2 to make and priced at $7. Assume that the discount rate is 14 percent and the tax rate is 34 percent. Should the company make the purchase? First calculate the operating cash flow. Please show your all work and provide step by step solution.