Question: plz answer with full steps and calculator steps also . thanks 10-21 Project Evaluation Fox Hollow Franks is looking at a new system with an
10-21 Project Evaluation Fox Hollow Franks is looking at a new system with an installed cost of $540,000. This equipment is depreciated at a rate of 20 percent per year (Class 8) over the project's five-year life, at the end of which the sausage system can be sold for $80,000. The sausage system will save the firm $170,000 per year in pre-tax operating costs, and the system requires an initial investment in net working capital of $29,000. If the tax rate is 34 percent and the discount rate is 10 percent, what is the NPV of this project? IdT 1+0.5k SdT 1 PV tax shield on CCA =- d+k 1+k d+k (1+k)
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