Question: Dog Up! Franks is looking at a new sausage system with an installed cost of $374,400. This cost will be depreciated straight-line to zero over

Dog Up! Franks is looking at a new sausage system with an installed cost of $374,400. 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 $57,600. The sausage system will save the firm $115,200 per year in pretax operating costs, and the system requires an initial investment in net working capital of $26,880.

If the tax rate is 25 percent and the discount rate is 10 percent, what is the NPV of this project?

Multiple Choice

$24,087.51
$13,897.87
$50,911.31
$40,721.67
$42,757.76

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