Question: Project Evaluation Kolbys Korndogs is looking at a new sausage system with an installed cost of $655,000. This cost will be depreciated straight- line to

Project Evaluation Kolbys Korndogs is looking at a new sausage system

with an installed cost of $655,000. This cost will be depreciated straight- line to zero over the projects five-year life, at the end of which the sausage

system can be scrapped for $85,000. The sausage system will save the firm $183,000 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 22 percent and the discount rate is 8 percent, what is the NPV of this project?

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