Question
1) Dog Up! Franks is looking at a new sausage system with an installed cost of $608,400. This cost will be depreciated straight-line to zero
1)
Dog Up! Franks is looking at a new sausage system with an installed cost of $608,400. This cost will be depreciated straight-line to zero over the project's 4-year life, at the end of which the sausage system can be scrapped for $93,600. The sausage system will save the firm $187,200 per year in pretax operating costs, and the system requires an initial investment in net working capital of $43,680. |
Required: |
If the tax rate is 32 percent and the discount rate is 12 percent, what is the NPV of this project? |
rev: 09_18_2012
$-33,474.26 | ||||||||||||||
$-49,394.83 | ||||||||||||||
$-51,864.57 | ||||||||||||||
$-89,844.28 | ||||||||||||||
$-73,923.71 2)
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