1 A B C D E FL G H J 2 34 4 Dog Up! Franks is looking at a new sausage system with an installed cost of $385,000. 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 $60,000. The sausage system will save the firm $135,000 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 21 percent and the discount rate is 10 percent, what is the NPV of this project? Input area: 10 5 6 Installation cost $385,000 7 Pretax salvage value $60,000 8 Operating cost per year $135,000 9 Initial NWC $35,000 10 Tax rate 21% 11 Discount rate 10% 12 Project and asset life 5 13 14 (Use cells A6 to B12 from the given information to complete this question. You must use the built-in Excel function 15 to answer this question. Taxes on the salvage value should be negative for a tax liability and positive for a tax 16 credit.) 17 18 Output area: 19 20 Aftertax salvage value 21 Sell equipment 22 Taxes 22 23 Aftertax cash flow 24 25 26 Costs 27 Depreciation 28 EBT 29 Taxes 30 Net income Year 0 Year 1 Year 2 Year 3 Year 4 Year 5