Question: I'm running into an error when getting to my answer. Dog Up! Franks is looking at a new sausage system with an installed cost of

 I'm running into an error when getting to my answer. Dog
Up! Franks is looking at a new sausage system with an installed
I'm running into an error when getting to my answer.

Dog Up! Franks is looking at a new sausage system with an installed cost of $515,000. 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 $81,000. The sausage system will save the firm $153,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $32,000. 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 Calibri (Body) 12 ' ' 101 Paste BIU V A EE E12 x fe A B 1 Sausage System 2 Useful Life 3 Annual depreciation under straight line method to make zero 4 Salvage Value 5 Net Salvage Value 6 Annual Cost Savings 7 Net Income Before Tax = Cost Savings - Depreciations 8 Net Income After Tax 9 Net Annual Cash Flows - Net Income After Tax + Depreciation 10 Initial Required Qorking Capital 11 Net Initial Cash Outflows = Initial Cost of Assets + Initial Required Working Cap. 12 13 Discount Rate 14 Net Present Value of Sausage Asset - Present Value of CF - Initial CF 515,000 5 years 103,000 81,000 63,180 153,000 50,000 39,000 142,000 32,000 547,000 10% #NAME? 15 16 17 18

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