Question: Assignment Project Evaluation. Kolby?s Korndogs is looking at a new sausage system with an installed cost of $735,000. This cost will be depreciated straight-line to

Assignment

Project Evaluation. Kolby?s Korndogs is looking at a new sausage system with an installed cost of $735,000. This cost will be depreciated straight-line to zero over the project?s 5 year life, at the end of which the sausage system can be scrapped for $105,000. The sausage system will save the firm $204,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 34%, and the discount rate is 8%, what is the NPV of this project?

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