Dog Up! Franks is looking at a new sausage system with an installed cost of $490,000....

 

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Dog Up! Franks is looking at a new sausage system with an installed cost of $490,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $71,000. The sausage system will save the firm $148,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $29,500. If the tax rate is 22 percent and the discount rate is 10 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV Dog Up! Franks is looking at a new sausage system with an installed cost of $490,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $71,000. The sausage system will save the firm $148,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $29,500. If the tax rate is 22 percent and the discount rate is 10 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV

Answer rating: 100% (QA)

To calculate the NPV Net Present Value of the project we need to determine the cash flows associated ... View the full answer